Madhavan Ramanujam - How to Price Products - [Invest Like the Best, EP.298]
My guest today is Madhavan Ramanujam. Madhavan quite literally wrote the book on how to price products, it’s called “Monetizing Innovations” and his concepts have been used by companies across the world like Porsche, Uber, LinkedIn, and SuperHuman. Our conversation is a masterclass on pricing. We discuss common mistakes when pricing products, why you need to focus on benefits rather than features, and how to pick the right monetization model. Please enjoy my conversation with Madhavan Ramanujam.
For the full show notes, transcript, and links to mentioned content, check out the episode page here.
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[00:02:48 ] - [First question] - How he arrived at a radically different way of building products
[00:05:07 ] - An example of coming up with a price before the product
[00:08:35 ] - Distinctions between a willingness to pay and positive feedback
[00:10:29 ] - How to make sure you’re talking to the right potential customer in the first place
[00:13:32 ] - Productizing for different customer segments
[00:16:16 ] - Questions companies should be asking to get accurate feedback
[00:21:18 ] - What he’s learned about the motivations of potential buyers
[00:22:43 ] - What leaders, killers, and fillers are
[00:24:37 ] - Some of the biggest mistakes companies make while following his formula
[00:25:35 ] - A rule of thumb for what is a benefit versus a feature
[00:27:35 ] - Five distinct pricing models for charging a customer
[00:30:46 ] - Whether or not the value piece of all of this revolves around time and money
[00:33:27 ] - What he tells entrepreneurs about pricing their products that most surprises them
[00:35:16 ] - Defining the first four categories of failure
[00:40:13 ] - Reasons why so many innovations fail to monetize and pricing being a CEO topic
[00:41:51 ] - Good rules that leaders can use to have a general sense for effective pricing
[00:47:38 ] - Behavioral changes and observations as the absolute price move up and down
[00:50:36 ] - Is there a pricing genius we should take note of?
[00:53:18 ] - The single question every leader should ask themselves
[00:53:46 ] - The kindest thing anyone has ever done for him