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Product Manager Tools
Metrics

Metrics

What metrics are important?
Most product teams use some form of metric suite to track product success. But for many, the metrics they use are ‘lag’ metrics; they focus on sales or profit and are measuring the result rather than tracking progress. The equivalent would be if the military deployed early warning system that only told them when an enemy missile had hit their base.
Metrics are more useful when they’re ‘lead’ focused, giving an early warning that enables you to take action. Things like decreasing usage time, reduction in API calls, or even a reduction in the number of support calls might be lead indicators that help you react before the lag indicator of reduced revenue hits your business.

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Setting a Market Price Point

Setting a Market Price Point

Setting a market price point.
Step 6 of 6 – Constant refinement model
Once in market it’s critical to keep reviewing pricing – markets change, competitors change, customer perception of value can change. We use marginal gain thinking to look for small changes in the product, the price or the position we take in market to deliver maximum customer value and extract maximum commercial value. Constant customer research helps us identify marginal gain opportunities.

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Setting a Market Price Point

Setting a Market Price Point

Step 5 of 6 – Test and adjust the pricing model

Steps 1-4 are great pre-launch work, but once in market you need to assess and adjust your price to maximise the success of your product. A/B testing lets you do this, comparing actual results by presenting your customers with a range of prices to see which one does better. As an example of this is the real world take a look at Amazon ; prices change regularly as they refine pricing to identify the sweet spot.

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Setting a Market Price Point

Setting a Market Price Point

Step 4 of 6 – Define the pricing model
There are a huge variety of pricing models to consider. The pricing model is a fundamental driver of product success.
Many models can be combined into a unique pricing model. Pricing alters throughout the product lifecycle and the pricing model is likely to change to reflect market conditions. Some examples of pricing models are:
Freemium pricing is the practice of offering a basic set of services for free (or a low price point) , and enhanced features and/or content for an additional price.
Psychological pricing is based on the theory that certain prices and offers have a buyer impact. In this method, prices are often expressed as just-below numbers (e.g.£1.99) or increased product volume offers (e.g.2 for 1)

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