Monetizing Innovation

Chapter 12Maintain Your Price IntegrityAvoid Knee-Jerk Repricing

So now you know what it takes to maximize your new product's moneymaking potential before you bring it to market. But what if your product hits the market and the market is less than enthusiastic, and sales come in below expectation? After all, innovation does not come with a guarantee. What happens then?

What happens is that you will feel intense pressure from every corner of your organization to cut the price. That's almost always a bad idea.

In this chapter we will explain why this happens; how you can resist the pressure to lower the price you've so thoughtfully and carefully set (because you followed the steps outlined in the previous chapters); and what you can do instead.

When sales volumes don't meet projections in the first few weeks after launch, you've reached a moment of truth. And in that critical moment, far too many companies flinch, cutting their prices because they feel they must.

But reducing your price so soon sends an unintended message: that your new offering has less value than you initially communicated. In effect, you're telling potential buyers your company has made a mistake, in quality or otherwise. But even if you have a quality problem, a price cut won't fix it. In fact, it could make matters worse for you.

Here's a great example of a company that didn't flinch in the face of bad market news and resisted pressure to cut prices: Apple's April 2015 introduction of the much-hyped Apple ...