How to enhance value through innovative commercial models?

How to enhance value through innovative commercial models?

Price is arguably the most important component of the marketing mix. Many a deal is sacrificed at the altar of the price. Thanks to the state of the world economy, advances in the technology and intense competition, the industry is constantly innovating pricing models. The old pricing models (T&M for instance) are no longer relevant in the digital and start-up world. How to enhance value through innovative commercial models? We are likely to see more of unit, incentive and risk-reward pricing models in the futOutput-based pricing models for testing have become increasingly popular as service vendors have been asked by customers to demonstrate they have “skin in the game”. As test automation develops, leading vendors of testing services have to demonstrate the value they bring to tableure. In other words, pricing models are getting integrated tightly with the business models.

 

In this post, I highlight how performance, user experience, and omnichannel framework are challenging the newer pricing models from benchmarking perspective in a conversation with Mathew Crabbe. Rest of the post is an excerpt from the article, Test pricing: Automation brings new benchmarks, published by QA Financial – an independent news and events platform covering quality assurance, testing and IT risk management of software and technology. The full article features leaders from Accenture, Infosys, Testhouse and Wipro.

 

The article argues that innovative pricing models for testing have become increasingly popular as service vendors have been asked by customers to demonstrate they have “skin in the game”. As test automation matures, a wide range of pricing agreements, designed to balance the risk and reward in testing partnerships will come to fore.

 

The article argues that innovative pricing models for testing have become increasingly popular as service vendors have been asked by customers to demonstrate they have “skin in the game”. As test automation matures, a wide range of pricing agreements, designed to balance the risk and reward in testing partnerships will come to fore.

 

Please read this article by Sridhar : Alliances are made in boardroom but tested in field

How is outcome based pricing model effecting value addition to the client

 

A key issue in defining a new (Outcome-based) model for pricing is how to measure the performance of the end-product. “More and more of our customers are moving to innovative commercial models such as output, or outcome, based models for pricing,” said Sridhar Throvagunta, Head of Testing Services Marketing, Alliances, Analyst and Advisor Relations at Wipro – the IT consulting and outsourcing firm. So far, this has been especially true for apps designed for the retail financial marketplace, Throvagunta said, because product development there has increasingly focused on the experience of the end-customer.

 

When it comes to benchmarking and what that means in terms of the performance of an app, there are three key yardsticks to apply, Throvagunta said. These are the response time of the app, the quality of the app (in terms of design or user experience, for example) and, finally, the completeness and accuracy of the functionality of the app.

 

The last criteria — functionality — is often taken for granted and might seem hard to define. But it’s critical to benchmark that performance compared to the alternatives a customer might use, said Throvagunta. He cites the example of an auto insurance company that wants customers to use a new app because that is the fastest and cheapest way for them to get the best quote. But is that what the app delivers, compared to say a conversation with a human agent? A human agent might just be able to get a better deal/ discount for the customer, based on information the agent can glean in a conversation about the customer’s detailed risk profile. Can the app really connect the customer to a better deal, and how could that be tested? The complexities of testing in the real world means a framework of “omnichannel assurance” is essential, Throvagunta said.

 

Postscript:

A good pricing strategy influences client relationship, sales effectiveness and even innovation among other things. For a detailed account on pricing for value, please take a look at my slides from the keynote “Testing 3.0 | Pricing for Value” at the QAI Software Testing Conference 2012. Only the Q&A part of the plenary keynote video is available due to some technical issues.

 

This post features an excerpt from the article originally published on QA Financial titled Test pricing: Automation brings new benchmarks.

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Sridhar Throvagunta (@SriSukta) is the Practice Head at Wipro Ltd (NYSE: WIT). He is the chief architect of State of Quality 2016, a path-breaking grounds-up report. Over the years, he orchestrated several of Wipro’s recognitions such as LEADER in Gartner MQ, Everest PEAK and other leading analysts. His contributions also span across setting up, nurturing and energizing specialized practices and adding several marquee logos in BFSI, Retail, HLS and Manufacturing.

Sridhar is a digital expert and knowledge farmer, who believes in mentoring and building high-performance teams. He is a featured speaker and blogger on technology trends and organizational leadership. He is a Computer Science Engineer with an MBA from IIM Calcutta.

Signature Strengths:

Automation, Performance, Big Data and Digital Assurance and Strategy, Marketing, Analyst, Advisor and Alliance Relations

Sridhar Throvagunta (@SriSukta) is the Practice Head at Wipro Ltd (NYSE: WIT). He is the chief architect of State of Quality 2016, a path-breaking grounds-up report. Over the years, he orchestrated several of Wipro’s recognitions such as LEADER in Gartner MQ, Everest PEAK and other leading analysts. His contributions also span across setting up, nurturing and energizing specialized practices and adding several marquee logos in BFSI, Retail, HLS and Manufacturing. Sridhar is a digital expert and knowledge farmer, who believes in mentoring and building high-performance teams. He is a featured speaker and blogger on technology trends and organizational leadership. He is a Computer Science Engineer with an MBA from IIM Calcutta. Signature Strengths: Automation, Performance, Big Data and Digital Assurance and Strategy, Marketing, Analyst, Advisor and Alliance Relations