Critical success factors for successful pricing research

In my day-to-day life at TBR, I regularly interact with clients seeking to undertake pricing research. Their needs are varied. Some want to understand pricing for a new product or service or sustain their competitive position for an existing offering, while others seek to design an overarching commercial strategy or to increase the effectiveness of their sales teams by arming them with tactical data and insights — and nearly all are focused on influencing revenue and margin.

Capturing pricing data that can be utilized defensibly for decision making is challenging. All pricing is situational and can be influenced by any number of factors. Pricing decisions influence, and are influenced by, nearly all organizational departments, from sales and finance to product management and business strategy, and thus are often highly politicized within ICT enterprises.

Based on our regular experience in serving the pricing research and consulting needs of our client base across ICT industry segments, we have identified five critical success factors that can help clients navigate these challenges:

  • Start with outcomes: We often find that our customers come to us with a research concept in mind, but not a defined goal or set of operational plans for how the research will be deployed in their organization. Sometimes the request is: “We need to know what vendors like us are charging.” But the real goal of the team may be to answer the question: How can we be more efficient in resourcing deals? By starting with the end goal and use case in mind, we find that we often explore areas adjacent to pricing, and that insights on those topics, in concert with pricing data, unlock business value for our client base.
  • Focus on business impact: For all the research we do at TBR, including in pricing, we advise our clients to frame all research needs around the underlying business impact. We design projects, including the questions we propose to cover in primary research and the data that we seek to capture, to ensure that the recommendations we deliver around pricing aim directly at influencing business strategy, revenue and profitability.
  • Focus on context: Our pricing research methodology relies on interviews with vendors and customers. This approach allows us to capture not only pricing data but also contextual data and insights on topics such as discounting, commercial incentives, pricing structures and portfolios. When paired with core quantitative pricing data, these types of interview-driven insights provide predictive value focused on vendor and customer pricing and consumption behavior.
  • Build market constructs: To normalize against deal-specific influencers that can impact a true view of market pricing, we design our research to focus on deal constructs. These constructs are used in all interviews to ensure apples-to-apples comparisons and that we are characterizing a full spectrum of potential price points. Context on topics such as discounting is addressed through qualitative conversations.
  • Consider adjacent markets: Many times, particularly with clients seeking to stand up pricing models and price levels for new offerings, we find that the direct peer landscape may not be the best basis of comparison. By looking at adjacent offerings and considering how similar-yet-adjacent offerings are packaged and delivered, clients are able to gain a broader foothold in their peer landscape in its entirety, and often identify areas to elevate value proposition and raise prices accordingly.


SAIC sees more market stability & another CR in September

To remain competitive in those (SETA) areas may require engaging in M&A to add scale; alternatively, moving up the value chain means investing more in applications development and higher-skilled talent. SAIC has options, and its next choices will determine its fate in a rapidly changing industry. — Joey Cresta, Analyst

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JEDI’s disruption may go beyond the cloud

That shift is “elevating consensus-building into a prerequisite for embarking on disruptive technology adoption” for desired government outcomes. — Joey Cresta, Analyst

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Competition will intensify in the U.S. telecom market heading into 2020 due to the launch of 5G services and the potential T-Mobile/Sprint merger

HAMPTON, N.H. (June 8, 2018) — Wireless revenue rose 3.1% year-to-year to $58.4 billion among U.S. carriers covered in Technology Business Research Inc.’s (TBR) 1Q18 U.S. & Canada Mobile Operator Benchmark as higher equipment revenue spurred by the adoption of premium devices offset continuing service revenue declines. Increased adoption of premium devices is benefiting equipment revenue as devices such as the iPhone X have pushed the acceptable average selling price for smartphones to over $1,000. Verizon, AT&T and Sprint expect service revenue declines will gradually moderate in 2018 as the bulk of customers are now on unsubsidized service plans. However, service revenue will be negatively impacted by the new ASC 606 industry accounting standard as well as lower overage revenue stemming from the growing adoption of unlimited data plans.

The report examines how the recently announced T-Mobile and Sprint merger would disrupt the wireless and cable industries should it gain regulatory approval. “The proposed T-Mobile merger would serve as a lifeboat for Sprint, alleviating the company’s long-term financial challenges, including its high debt load and struggles to generate positive net income,” said TBR Telecom Analyst Steve Vachon. “The scale gained from Sprint’s operations would also enable T-Mobile to compete more aggressively in the 5G era and strengthen its margins, which historically have trailed those of Verizon and AT&T.”

The proposed T-Mobile and Sprint merger would also disrupt the cable and pay-TV industries, as the combined company would have a base of over 125 million wireless subscribers to which it could cross-sell T-Mobile’s upcoming Layer3 TV video platform. The combined company’s 5G services may also serve as a replacement for traditional wireline broadband connectivity as the combination of T-Mobile’s and Sprint’s spectrum would yield estimated speeds of 450Mbps on a national average.

Combined wireless revenue among Tier 1 Canadian carriers rose 8.8% year-to-year to $6 billion due to continued postpaid additions spurred by shared data programs and higher data usage arising from the accelerated speeds offered by LTE-Advanced services. Despite steady increases in smartphone penetration in Canada, the postpaid market continues to flourish as Rogers and Bell Mobility reported their highest first quarter postpaid net additions in 1Q18 since 2009 and 2011, respectively. Subscriber growth will remain strong throughout 2018 as prepaid customers transition to postpaid plans with higher average revenue per user (ARPU) and as connected device adoption increases in Canada. Carriers will also have the opportunity to target first-time wireless customers in Canada, including youths and young adults as well as immigrants entering the country.

The U.S. & Canada Mobile Operator Benchmark details and compares the activities of the largest U.S. and Canadian operators, including financial performance, go-to-market initiatives and resource management strategies. Covered companies include AT&T, Verizon, Sprint, T-Mobile, U.S. Cellular, Rogers, Telus and Bell Mobility.


Success of GitHub deal hinges on Azure’s open source appeal

Microsoft is of the mindset that once it gets a customer on Azure, it can expand the account from there. In an ideal world, this acquisition could start developers thinking of Microsoft as a ‘go-to’ in terms of open source. — Kelsey Mason, Senior Analyst

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Dell’s post-EMC acquisition debt could dampen future progress

Dell Technologies has reported a 19 per cent year-on-year revenue surge for the three months ending 4 May, to US$21.4 million, but the debt burden arising from the company’s 2016 EMC acquisition remains a challenge.


Practical info on tap at SAP Sapphire Now 2018

It will be interesting to see how they take all of their various [CRM] front-office assets — Hybris, Callidus, Gigya — and create one comprehensive suite and how they tie Leonardo, specifically the AI and IoT aspects, to that portfolio. I expect that CRM rebrand to share center stage with S/4HANA and SAP Leonardo, and the theme once again will be the intelligent enterprise. — Kelsey Mason, Senior Analyst

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VMware’s tech partner collaboration ramps up revenue

The company continues to invest in [research and development] to build out its capabilities, underscored by recent updates to vSphere, Workspace ONE, vRealize and vSAN as well as partner-led container updates through Pivotal, which recently underwent its own IPO. — Cassandra Mooshian, Senior Analyst


JEDI is the force leading AWS’ charge into the U.S. Department of Defense

The DOD’s JEDI cloud contract illustrates how IT prowess enables a strong national security posture. Central governments, even more than the largest commercial enterprises, struggle to keep pace with the current rate of technological change. Many times, major decisions do not occur proactively, but rather are made in response to gaps in capabilities that become matters of national security. The U.S. Department of Defense’s (DOD) Joint Enterprise Defense Infrastructure (JEDI) contract indicates the DOD finds itself in that very position, spurred by a need to address technology gaps resulting from a decades-long lapse in investment that started with the end of the Cold War. — Cassandra Mooshian, Senior Analyst; and Joey Cresta, Analyst

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