Case Study: Price Setting – Biotech Startup
Challenge: A biotech startup needed to understand the value provided by its cell-specific extracellular matrix biomaterials to different customer groups and consequently determine a Go-to-Market price and strategy.
Approach: The company engaged Wiglaf Pricing to coach their executives on value-based pricing and develop an economic value to customer (EVC) model for their different anticipated customer segments.
Via executive interviews and group strategy sessions, Wiglaf Pricing and the client determined the relevant sources of value that the new testing materials provided to different customers. The EVC model was iteratively improved with new data and information that clarified assumptions and reflected real customer value.
Customer segmentation was revealed to be more complicated than initially thought by the client, offering additional opportunities for targeted pricing. Such segmentation, combined with the EVC, informed not only the best launch prices but the best customer segments to target for the launch.
Result: The client had a much clearer understanding of their own product’s value and their target customers. They had a detailed EVC that quantitatively demonstrated the delivered value per customer segment and the client’s capturable amount of that value. Executives felt clearer about their product strategy and how to position their Go-to-Market plan for success.