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Monetizing Innovation

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Monetizing Innovation

How Smart Companies Design the Product Around the Price

Wiley,

15 min read
10 take-aways
Audio & text

What's inside?

Read this book before you design your next product.

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Editorial Rating

8

Qualities

  • Innovative
  • Applicable

Recommendation

Consultants Madhavan Ramanujam and Georg Tacke offer a no-nonsense path to successful product design. Most companies go directly from idea to product design. They never know whether customers want and will pay for a product until after its launch. The authors describe “nine rules” for products and services designed to meet immediate client demands and “willingness-to-pay.” getAbstract recommends this clear guide’s sensible advice to anyone planning a new product or service.

Summary

Why Products Fail

About 75% of new products don’t meet sales expectations or fail entirely. Products fail mainly because organizations design them before they determine their customers’ desire for them and their “willingness-to-pay” (WTP). Test your customers’ WTP before you begin product design. Know precisely what they want, what they will pay for it and whether the product would make a profit for you. Design to customer specifications, and include only the elements they say they’ll buy.

Reasons to Fail

Products that firms design before they understand their customers’ WTP fail for four reasons:

  1. “Feature shock” – When product designers advocate for functionality that isn’t in your original plan or they want to build more tools because “customers don’t know what they want,” feature shock often results. Too many features and a high price tag for unnecessary bells and whistles leads to stagnant sales. To save the product, manufacturers drop the price. Typically, once they do that, the product loses viability.
  2. “Minivations” – Organizations undermine their potential when they...

About the Authors

Madhavan Ramanujam and Georg Tacke lead Simon-Kucher, a consulting firm that helps clients design products that customers want. For more information, see monetizinginnovation.com.   

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