Product Managers Know That Pricing Is All About The Presentation

How to correctly price a product has always been a bit of a black art for most product managers. The goal is to not price a product so high that nobody is willing to buy it, while at the same time not pricing it so low that you end up leaving money on the table. It turns out that the correct way to price a product has to do with its parts, not with its cost…

What Do Your Customers Value?

Pricing for a product comes down to two things: what are your customers willing to pay for the product and how satisfied will they be with the amount that they ended up paying for it? In order to create a price that will meet both of these customer expectations, product managers need to find the best way to present their product’s benefits to their customers.

This is where the problems first show up. All too often product managers spend their time (often at the request of their senior management) focusing on the cost of their product when instead they should be worried about communicating the product’s benefits.

The correct way to go about pricing your product is to view it not as a complete product, but rather as a collection of components (product, accessories, support, configuration options, documentation, etc.). Each component does not have the same value to your customer. This means that product managers need to take the time to carefully price each component so that it closely matches the value that the customer places on that particular component.

What Customer Pricing Experiments Show

Researchers Dr. Rebecca Hamilton and Dr. Joydeep Srivastava have studied how customers value different components of a product. They used auto repairs as the product that was being offered and they identified three different components of this product: parts, labor, and shipping (of the parts).

In their studies, the researchers discovered that customers valued parts more than labor, and parts more than shipping. The take-away from this research was that customers assigned a higher price to those things that they viewed as providing them with a higher benefit.

An important lesson for product managers came from the second part of the researcher’s study. Here they dropped the price for labor to nothing. That made customers nervous – somewhat surprisingly they preferred to pay at least something for this component. Clearly, dropping the price of a product’s component below an accepted threshold doesn’t make the product more attractive – it actually makes it less attractive.

Three Guidelines

The end result of the studies were the creation of three guidelines for product managers who are getting ready to price their products:

It’s All About Needs: Product managers need to make sure that they fully understand their customer’s needs. If your car battery needs to be replaced, you will be willing to visit a store and pay full price for a new battery and a big discount on the motor oil that you’ll need later instead of visiting another store that can offer you a small discount on both.
Bundles Work: The researchers found that product managers who can combine both high-value and low value components together in packages do the best. They also caution that a product manager should only take the step of offering low-value components for free if that is what the current market will allow.
Value Is In The Eye Of The Beholder: If a product that you are responsible for has a benefit that you think that customers should be placing a greater value on, then it is the responsibility of the product manager to do something about it. Specifically, you need to find ways to clearly communicate the value of that component to your customer in order to boost its value.
What All Of This Means For You

In the end, what your customers are going to be willing to pay for your product is going to depend on how valuable they view it as being. Product managers need to understand that their customers don’t see their product as a blob, instead they see it as a collection of multiple components that they place different values on.

In order to price a product correctly, product managers need to break their product up into the components that their customers see. Then those components need to be matched to your customer’s goals – what do they really value? Finally, high and low benefit components can be grouped together in order to boost your customer’s willingness to pay for the product.

Nobody ever said that pricing a product correctly was going to be easy. However, taking the time to understand how your customer views your product and the value that they put on the different components of your product is the key to doing pricing correctly. Get this right, and you’ll have found the secret to being a successful product manager!

Optima Tax Relief Announces New IRS Paperless Correspondence Initiative

The Paperless Processing Initiative
The IRS Paperless Correspondence Initiative is a strategic move aimed at reducing the reliance on paper documents and promoting a more streamlined, secure, and technologically advanced system for sending out IRS correspondence. Currently, taxpayers must respond to IRS notices through mail which creates a burden for the taxpayer. On the other side of the aisle, IRS employees must then manually enter taxpayer information into computers, which creates significant delays for IRS staff.

Every year, the IRS receives 76 million paper returns and 125 million pieces of mail, including notice responses and non-tax forms. On top of that, the IRS currently stores over 1 billion historical documents, which costs the agency $40 million each year. Using Inflation Reduction Act resources, the IRS is able to fast-track their efforts to modernize their technology and processes. By 2024, taxpayers should be able to opt in for paperless correspondence. The agency is also hoping to go paperless when digitizing paper-filed tax returns.

Key Objectives
The initiative encompasses several key objectives:

Efficiency Enhancement: By eliminating the need for paper documents, the IRS aims to expedite its processing procedures, reducing the time required for document handling, data entry, and communication.
Cost Reduction: Moving away from paper-based processes can significantly reduce costs associated with printing, postage, and physical storage of documents.
Accessibility and Convenience: A digital approach makes it easier for taxpayers, tax professionals, and other stakeholders to access and submit documents electronically, facilitating a more user-friendly experience.
Security Enhancement: Digital processing can enhance data security, mitigating risks associated with physical document loss, tampering, and unauthorized access.
Implementation and Support
The IRS has put in place mechanisms to facilitate the transition to paperless processing. Taxpayers and tax professionals can make use of secure online portals and electronic communication channels to submit documents, receive notifications, and interact with the IRS electronically.

By filing season 2024, taxpayers will be able to digitally submit all correspondence and e-file 20 additional tax forms. In addition, 20 of the most common non-tax forms will be available for digital filing. By filing season 2025, the IRS plans to add an additional 150 of the most used non-tax forms. They also plan to digitally process all paper-filed returns, including information returns. The IRS hopes to digitize the 1 billion+ historical documents, which will not only save $40 million a year but will also give taxpayers access to their own data. Finally, half of the paper-submitted correspondence, non-tax forms and notice responses will be digitally processed, with the expectation that all correspondence will be digitally processed by filing season 2026.

Impact on Taxpayers and Professionals
Taxpayers and tax professionals stand to benefit in various ways:

Faster Processing: Electronic document submission can expedite the processing of tax-related requests, leading to quicker resolution and responses from the IRS.
Reduced Paperwork: Taxpayers can enjoy a reduction in paperwork, eliminating the need to physically mail or fax documents to the IRS.
Real-time Updates: Electronic filing allows for real-time tracking and updates on the status of submitted documents.
Environmental Benefits: The shift to digital processes supports environmental sustainability by reducing paper consumption and the carbon footprint associated with paper production and transportation.
Conclusion
The IRS Paperless Processing Initiative marks a significant step towards embracing digital transformation, fostering efficiency, accessibility, and sustainability in its operations. As the IRS continues to modernize its processes, taxpayers can look forward to a more streamlined and user-friendly experience while contributing to a greener and more sustainable future.

Creative Tips to Make Your Presentation Folder Stand Out

When it comes to perfecting your business materials, first impressions are vital, and nothing is truer when preparing presentation folders for meetings with customers or clients. Taking a creative look at how you present yourself in the boardroom could propel companies of all sizes to new heights and we have a few tips to ensure you and your brand stand out, even in very crowded marketplaces and sectors.

There are so many ways that you can make your business materials memorable and many printing and packaging companies provide laser cutting, embossing, foil stamping and other services to give you the edge you need to get ahead. Laser cutting is an excellent way to put a creative stamp on materials around the office and can often provide an exciting extra to give to prospective clients. Laser cutting machines are a complex piece of machinery, these can be used to cut creative shapes in a variety of materials as well as improve edge quality.

Thermography is another service provided by printers and packaging specialists, this method adds texture to printed designs and works in unison with embossing and lithography. Foil embossing is a popular technique used to jazz up presentation folders and customised ring binders. Utilising a specialist printing method, the material is raised creating a three dimensional effect that is simple yet unique.

Foil stamping is another favourable method and tends to stick in the mind of potential clients, making it a highly recommended addition to business materials. Stamping adds a powerful, creative touch to presentation folders, business cards and other materials and tends to command the attention businesses of all sizes are looking for. Die cutting can also be used to create a customised and unique shape or design, and is an affordable but impressive option.

As well applying different textures and effects to your presentation materials, why not consider making the folder itself an unusual shape or size? Generally folders are made to a standard size to accommodate standard sizes of paper but going a little larger or smaller can really make yours stand above the rest. The contents of folder is also important, many companies don’t really go into much depth when it comes to demonstrating their assets to their target audience so make your folder more than just a logo and slogan – go into great detail and describe your business ethos, introduce your team, provide customer testimonials and more to present a well-designed product with undeniable substance.