How do you measure the success of your pricing optimization efforts in Product Marketing?

There is one and only simple answer-your P&L. At the end of the day-your top and bottom lines are your clear feedback. What is there to prove you are right? 1 - your marginal contribution improve 2 - your off-take growth 3 - sales volume (AND value) increase 4 - category management relief (lets faced, we cant put all SKUs on the shelf))))) 5 - supply and logistic improvement 6 - stock steering progress 7 - more focus on top SKUs trade-marketing - less spends. From my professional life just one example - I cut -37% of SKUs (well, the portfolio was huge due to several acquisitions) & gained +43% at margin contribution level and I`m talking about 700 mln euro portfolio. And yes, we put our effort for other components, I`m happy to share.

My benchmark has always been keeping my eye on Market Share. You have probably forecasted a higher rate of sales after a price adjustment. But a boost in revenue is negligible if the overall market is expanding at faster rate than your product/service.

Boosting sales volume indicates successful pricing. First, track unit sales before and after pricing changes. Look for trends and consider external factors like seasonality or promo campaigns. Compare this data with other metrics (like revenue growth) to ensure price adjustments truly drive sales. If volume spikes, your pricing hits the sweet spot, balancing affordability and perceived value. Regularly revisit and tweak prices to stay competitive and aligned with consumer expectations. This strategy drives sustainable sales growth and aligns with business objectives.

Não é como uma receita de bolo, onde você segue uma receita e tudo acontece. Como falamos de produto há muitas variáveis que influenciam na aceitação do mesmo, o meio onde esse produto sera lançado, mas acredito que para medir o sucesso tem-se que focar na receita x lucro do mesmo, a partir desses dados podemos inicar uma analise de sucesso de um produto.

Measure the overall revenue growth to determine if the pricing changes are contributing to higher income. Compare revenue figures from different periods to assess the effectiveness of the pricing strategy. Revenue growth reflects how well the new prices are generating more income for the company.

Price Elasticity of Demand: How sensitive are your customers to price changes? This helps you understand if you can raise prices without significantly impacting sales.

For Customer Acquisition and Retention measurement you want to chose a metric that will monitor customer acquistion rates and retention rates. A postitive KPI would be one that shows the relationship between high retention rates with a steady or increasing acquisition rate.

Customer retention rates can indicate how well your pricing resonates with your target audience. High retention rates after a price change suggest that customers perceive the value of your product as worth the cost. Conversely, if retention rates drop, it may indicate that customers feel the product is no longer worth the price, signaling a need to revisit your pricing strategy. Maintaining a loyal customer base is crucial for long-term success and can validate your pricing decisions.

Pricing is not only a gateway to your P&L but also a reflection of the value your product commands in the market. Here are key metrics that can signal if your pricing change is successful: 1. Signup Rate: Check if the pricing-to-signup rate has improved. 2. Improved conversion from Free Trial to Paid Plan: 3. Bounce Rate of Pricing Page: Compare the bounce rate of your pricing page for the current month to the previous month. 4. Churn Rate: A reduction in churn suggests customers are satisfied with the value. 5. Customer Acquisition Cost (CAC): A decreased CAC is a positive signal. 6. Customer Feedback and Reviews: Positive feedback on pricing post-change can confirm the success of your strategy.

Define the goals of the pricing optimisation KPI: - Revenue - Profit Margin - Conversion rates - CAC - LTV And beyond the sales figures, look at: - Customer satisfaction surveys - Churn rate - Price elasticity of demand Use a control group for testing, i.e. A/B testing the pricing strategy. Also, it's not a one-time action. Consider the long game continuous monitoring of KPI's and customer feedback over time. This will allow for market led and data-driven decisions