Pricing and Value Calculator
Price Matters
The critical role of pricing in the commercial success of a business is often overlooked. NovAzure’s team has many years of experience of managing pricing strategy implementation in a range of businesses and scales of business.
In our experience, business managers devote a lot of energy to product and service development and money invested in communications, but often allocate surprisingly little time to price matters.
Owners of innovate IP, whether at a scale-up or any other kind of business, should keep in mind that the importance of getting pricing right cannot be over-stated.
Getting price wrong can be costly
For example, take a simple example of a product with a 25% unit margin. Let’s say that you decide to reduce the price by 15%. How much more product do you need to sell in order to make back the sacrificed margin? 15%? 100%? Actually, it’s considerably more than that!
Pricing practice should evolve with the maturity of your business. In the early days of your journey, price too high and customers may never try your offers. Price too low and you will struggle to turn a profit and it can be an uphill battle to restore unit margins in the future.
NovAzure Support For Price Management
- The NovAzure team has years of hands-on experience of successful price management across B2B, B2C and B2B2C product categories in both global corporates and in start-up/ scale-ups.
- We help clients to establish pricing that is consistent with the business strategy and marketplace. For example, we advise on:
- How to respond to competitor price moves or new market entrants.
- When to lead the market on price and when to follow others.
- Pricing of As-A-Service offers.
- How to set recommended sell-out prices and price lists.
- How to price for your resellers.
- Establishing the price of licenses of your IP to another party, as part of our licensing and IP advisory. See IP Licensing for more information.
Measuring Customer Value
NovAzure’s pricing practice is growing a reputation for building state-of-the art ‘Value Calculator’ (VC) tools to compare the total cost of ownership of different innovative technologies and the value that they can generate for customers.
We have built VC tools for energy-related applications, such as innovative liquid cooling of AI data centres and cooling of battery energy storage systems.
What Value Calculator Can provide
- Simple client-facing demonstrations of quantified relative cost and value across capex and opex.
- Comparisons of power consumption savings, translated into CO2 equivalence savings and water savings.
- Deal case history and data lakes for future analysis.
- Inputs for the pricing of products and services.
- Inputs for the pricing of licensed IP to third parties.
- Tools for your resellers to demonstrate your offers’ benefits to their customers.
- Beyond a pilot, the VC can illustrate potential roll-out scenarios for clients to accelerate wider adoption of your offers.
- Contribute to dialogues with your clients, helping you to unpack their needs, their pain points and their attitudes, in order to inform and support the negotiations.
How VC Can Help Your Customer Engagement
In addition to the features of NovAzure VC models, their availability during a customer engagement journey towards a deal closure can be invaluable:
- Simple client-facing demonstrations of quantified relative cost and value across capex and opex.
- Comparisons of power consumption savings, translated into CO2 equivalence savings and water savings.
- Deal case history and data lakes for future analysis.
- Inputs for the pricing of products and services.
- Inputs for the pricing of licensed IP to third parties.
- Tools for your resellers to demonstrate your offers’ benefits to their customers.
Couldn’t one manage just as well with a spreadsheet?
- Yes, you could always do that. But rebuilding a spreadsheet for every customer and every new scenario of a customer can be very time-consuming. Whereas VC tool inputs can be varied in seconds to reflect a new case and customers can receive rapid responses to their queries.
- NovAzure can manage the data integrity of the VC tool, including the gathering of a range of necessary inputs like energy tariffs and water tariffs of different geographies, which may change with geography and time for example, so that you don’t have to.
- Deal and customer case histories can also be easily retained, revisited and compared in one of our models.