WEBVTT

00:00:11.428 --> 00:00:15.223
So maybe it's worthwhile to
start with an example and the

00:00:15.223 --> 00:00:19.102
one that I like to give is, is
in the automobile industry.

00:00:19.519 --> 00:00:22.856
When you think about long time
ago, cars were sold as a base

00:00:22.856 --> 00:00:25.525
car with, you know, a very long
list of options.

00:00:25.608 --> 00:00:30.530
And over time this company moved
to packages of options that were

00:00:30.530 --> 00:00:35.118
bundled together, so a premium
package, a sport package, etc.

00:00:35.535 --> 00:00:41.082
So what prompts a company to
actually go towards the choice

00:00:41.082 --> 00:00:44.044
game is basically three factors.

00:00:45.003 --> 00:00:47.797
The first one is around
commoditization.

00:00:47.797 --> 00:00:50.633
Think about the PC industries or
etcetera, where through

00:00:50.633 --> 00:00:53.344
innovation, through progress,
you know cost goes down,

00:00:53.344 --> 00:00:55.847
everything becomes included,
your hardware become

00:00:55.847 --> 00:00:59.225
commoditized and you don't need
to actually provide so many options.

00:00:59.225 --> 00:01:00.852
Digitization will be the second one.

00:01:01.436 --> 00:01:04.981
So here we're talking about you
know hardware that start to have

00:01:04.981 --> 00:01:07.942
some IoT into it and some
software layers that provide

00:01:07.942 --> 00:01:08.943
additional values.

00:01:09.360 --> 00:01:12.739
When this is happening in an
industry, we see the needs for

00:01:12.739 --> 00:01:16.284
more like packages providing you
know both the hardware and the

00:01:16.284 --> 00:01:19.829
software together and and
different level of services offered.

00:01:19.954 --> 00:01:21.664
The third one is simplification.

00:01:21.664 --> 00:01:25.335
When you have too many choices,
too many SKUs, too many options,

00:01:25.335 --> 00:01:28.088
it's difficult for your customer
to make choice.

00:01:28.088 --> 00:01:31.382
It's difficult for your sales
organization to communicate the

00:01:31.382 --> 00:01:34.385
value associated with all of the
options that you have.

00:01:34.677 --> 00:01:39.140
So we end up in a situation
where company tries to remove

00:01:39.140 --> 00:01:40.892
this complexity and Dr.

00:01:40.892 --> 00:01:45.730
more of a clear value of the
choices that they can offer to

00:01:45.730 --> 00:01:46.523
customers.

00:01:47.065 --> 00:01:50.151
When you're thinking really of
moving from the bottom the

00:01:50.151 --> 00:01:53.571
custom games towards the Choice Game,
you're moving more towards

00:01:53.571 --> 00:01:56.324
value and you have to do that at
the segment level.

00:01:56.699 --> 00:02:00.578
So the first step is really to
conduct customer research and

00:02:00.578 --> 00:02:04.582
insights to better understand
these needs, this willingness to

00:02:04.582 --> 00:02:08.586
pay and segment you know these
customers into groups that have

00:02:08.586 --> 00:02:09.796
very similar needs.

00:02:09.963 --> 00:02:12.340
So you can start to put up a
package in front of each of

00:02:12.340 --> 00:02:13.508
these customers if you will.

00:02:13.716 --> 00:02:16.886
So they have to think about your
competitive dynamic and assess

00:02:16.886 --> 00:02:19.806
the sensitive dynamic that that
is happening in the market

00:02:19.806 --> 00:02:22.851
because you want for each of
your package to have a sense of

00:02:22.851 --> 00:02:25.687
where you're going to be
differentiated and how you will

00:02:25.687 --> 00:02:27.605
be communicating this
differentiation.

00:02:27.981 --> 00:02:30.733
So obviously competitive
assessments is very important.

00:02:31.025 --> 00:02:34.904
Then you can start to design the
package, test them in the

00:02:34.904 --> 00:02:39.117
market, then start to price them
where you would want your list

00:02:39.117 --> 00:02:40.493
price or or or price.

00:02:40.493 --> 00:02:44.289
That becomes an indication of
the value that each choice

00:02:44.289 --> 00:02:48.459
represent and the discounts that
will allow you to tweak this

00:02:48.459 --> 00:02:52.589
value based on the variation
within one segment of the of the

00:02:52.589 --> 00:02:55.508
willingness to pay of each
customer, right.

00:02:55.508 --> 00:03:00.096
So very important to think to
how you build this this pricing logic.

00:03:00.346 --> 00:03:03.266
Once you have that you will then
go back to the market and test

00:03:03.266 --> 00:03:05.935
again and test again and monitor
and continue to improve.

00:03:06.186 --> 00:03:10.899
Some of the challenges in this
move to choice are one during

00:03:10.899 --> 00:03:15.361
the design phase, so being
afraid of not providing enough

00:03:15.361 --> 00:03:18.031
offer services to their
customers.

00:03:18.239 --> 00:03:21.367
People tend to add more
functionalities or more features

00:03:21.367 --> 00:03:22.660
in each of the package.

00:03:23.077 --> 00:03:26.956
And while this sounds like a
good idea at the beginning, you

00:03:26.956 --> 00:03:30.793
actually may take the risk by
doing this of cutting yourself

00:03:30.793 --> 00:03:34.756
from customer who have a simpler
need and then don't offer the

00:03:34.756 --> 00:03:38.760
opportunity to for your customer
to grow with you to have this

00:03:38.760 --> 00:03:41.304
land and and expand motion if
you will.

00:03:41.846 --> 00:03:45.892
So it's so it's very critical in
a product design to stay simple

00:03:45.892 --> 00:03:49.437
and really not not not create
choices that are too rich.

00:03:50.313 --> 00:03:51.940
The second challenge is around
pricing.

00:03:52.106 --> 00:03:55.860
When you're thinking about
choices, what really matters are

00:03:55.860 --> 00:03:59.656
the price gap between these
choices because you want them to

00:03:59.656 --> 00:04:03.034
be representing the value that
is associated with the

00:04:03.034 --> 00:04:05.161
difference between these
choices.

00:04:05.787 --> 00:04:09.290
And usually company who are
coming from the custom game are

00:04:09.290 --> 00:04:11.834
doing pricing that is basically
discounted.

00:04:11.834 --> 00:04:15.630
They don't have the capabilities
of doing this value based type

00:04:15.630 --> 00:04:19.300
of approach to to assess the the
gap between the the value of

00:04:19.300 --> 00:04:20.510
each of the products.

00:04:20.760 --> 00:04:25.890
The third one is really the the
the underestimation of the

00:04:25.890 --> 00:04:30.270
effort that is required to
implement this package.

00:04:30.270 --> 00:04:34.732
Because when you think about
providing choices to a customer

00:04:34.732 --> 00:04:38.736
versus being in a in a custom
game, one you you have a

00:04:38.736 --> 00:04:43.283
marketing team that need to be
better equipped to communicate

00:04:43.283 --> 00:04:45.618
simply the value of its choices.

00:04:46.119 --> 00:04:49.414
Two, you need your sales team to
sell value not sell discount anymore.

00:04:49.414 --> 00:04:53.626
The changes are are beyond
pricing there it's it's it's a

00:04:53.626 --> 00:04:58.047
fundamental shift in how the
company work function moving to

00:04:58.047 --> 00:05:02.593
choices when you move towards a
more customer centric type of

00:05:02.593 --> 00:05:06.931
organization as you move to a
Choice Game, you clarify your

00:05:06.931 --> 00:05:11.436
offer, you better communicate
the value, the choices for your

00:05:11.436 --> 00:05:15.815
customers become simpler and we
see an acceleration of deal

00:05:15.815 --> 00:05:17.942
within the within the system.

00:05:17.984 --> 00:05:21.487
A good example of a of a company
who has made this move

00:05:21.487 --> 00:05:25.366
successfully was one of our
clients a couple of years ago in

00:05:25.366 --> 00:05:26.701
the medtech industry.

00:05:27.702 --> 00:05:32.040
So this company was providing
medtech hardware to hospitals

00:05:32.040 --> 00:05:35.626
and and and and labs for for
pharma and etcetera.

00:05:36.669 --> 00:05:41.174
All the time these hardware
became more commoditized.

00:05:41.382 --> 00:05:44.761
But while this was happening the
company was investing a lot in

00:05:44.761 --> 00:05:45.928
software and services.

00:05:45.928 --> 00:05:49.140
They were coming with these
hardware that they were not

00:05:49.140 --> 00:05:50.433
really monetizing well.

00:05:50.600 --> 00:05:54.729
So the exercise we did with them
was to basically bundle the

00:05:54.729 --> 00:05:58.941
hardware, the software and the
service into a as a service if

00:05:58.941 --> 00:06:02.987
you will offer with different
tie ring of level of services

00:06:02.987 --> 00:06:07.033
that offered us you know
discreet choices for the customer.

00:06:07.450 --> 00:06:09.577
This was at the end extremely
successful.

00:06:09.994 --> 00:06:14.123
This company that was, you know
going through a flat growth

00:06:14.123 --> 00:06:18.002
period prior to to this
transition starting to actually

00:06:18.002 --> 00:06:21.672
have growth around 5 to 10%
every year and a lot was

00:06:21.672 --> 00:06:25.426
attributed to the the
implementation of these choices.