Price and Value Proposition

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2 Price and Value Proposition High Value Output in a Lean, Respondent-Friendly Approach Dan McCoy VP Marketing, GI Supply Jess Spilman Senior Research Director, KJT Group Johan Mohd Sani Senior Research Manager, KJT Group

3 Objectives How to do more with less? How to prioritize a survey instrument? How to maximize impact/quality in a tight timeframe? How to deliver insights to strategic decision makers?

4 Study Background GI Supply developed unique enhancements for its endoscopic tattoo product. Needed to understand clinician and purchaser s reactions + pricing expectations. With imminent launch, timeline needed to be streamlined. Needed robust data without driving up project costs.

5 The main challenge seems to be how to get more projects done with the same or less money. Interest in research projects remains strong, though spend may be spread across more suppliers, more data sources, and more types of analyses GRIT Report

6 Doing More with Less Work with what you have Be creative in your approach Cost concerns? Timeline concerns? Solution: Use less resource intensive / streamlined analytics Solution: Shorter questionnaire / streamlined screener & follow your process (more on this later)

7 Streamlined Methodology Three simple rules: 1.1. Explain methodology trade offs Streamlined e.g. Gabor-Granger (pricing), Allocation exercise (adoption), Herfindahl-Hirschman Index (decision making concentration) Advanced e.g. Conjoint (pricing, adoption) Max-diff (priority) 1.2. Get client buy in Discuss budgetary and timeline implications of both options Obtain buy-in 1.3. NEVER lose sight of objectives Objectives: What is the uptake? Will it make them perform more procedures using the product? What is the price elasticity? What drives their purchase decisions?

8 Decision Making Process Pros and Cons of Choosing a Streamlined Approach Pros Less time to implement Less costly Fewer personnel needed Meets objectives Cons No tradeoff data Unable to customize market scenarios Less ability to understand price elasticity Client s Decision Making Process How did you arrive at the decision to go streamline? How was this received internally? How did you set expectations?

9 Streamlined Methodology - Gabor Granger This method is used to estimate demand, understand customer price sensitivity, and determine maximum revenue equilibrium for a product. Would you purchase this product at $5? Respondents are presented with a price for a product and asked if they would buy at that price. Based on their response (Yes/No) they are asked a follow-up question. Respondents continues to progress through the exercise until a reservation price can be determined. Yes Yes Would you purchase this product at $10? Reservation Price: $10+ Yes Would you purchase this product at $7? No Would you purchase this product at $8? Yes Would you purchase this product at $9? Yes No No Reservation Price: $7 No Would you purchase this product at $6? Yes Reservation Price $6 No Reservation Price $5 No Would you purchase this product at $3? Yes Would you purchase this product at $4? Yes Reservation Price: $4 No No Reservation Price: $3 Reservation Price: < $3 Reservation Price: $9 Reservation Price: $8

10 % Purchasing Examples of concise reporting - Gabor Granger 100% Price At Which Most Likely to Purchase/Recommend Product X All Respondents 80% 60% 40% 20% 0% 79% 77% 81% 64% 72% 67% 54% 54% 53% Avg. Price Product X Perceived Good Value ($XX) 47% 49% 51% 35% Targeted Price ($XX) $XX $XX $XX $XX $XX $XX $XX 36% 35% 21% 23% 22% 20% 16% 12% Total Gastroenterologist Procurement Price ALL QUALIFIED RESPONDENTS Q405 Given the features outlined in the Product X description, if Product X cost, would you purchase/ recommend Product X?

11 Percentage of Respondents Streamlined Methodology - HHI 60% 50% Herfindahl-Hirschman Index of Influence on Purchasing Decisions Total Mean = % 30% 20% 10% 0% 26% 21% 16% 11% 9% 9% 0% 3% 1% 3% Herfindahl-Hirschman Index Low Index many individuals have influence High Index few individuals have influence The Herfindahl-Hirschman Index chart shows how purchasing decisions are spread among individual roles at an organization. A high index (moving right on the graph) indicates few individuals are responsible for purchase decisions. A low index (moving left on the graph) indicates responsibility for purchase decisions is spread out amongst multiple roles.

12 Examples of concise reporting - HHI Adjusted HHI Score 55% Indicating Attribute 1 and Attribute 2 influence over half of the Enhanced Product X purchase decision. 51 Value of Product X Enhancements All Respondents Mean Herfindahl-Hirschman Index (HHI) Score: 27% Indicating greater levels of joint value among these enhancements. The Herfindahl-Hirschman Index (HHI) is a measure of concentration. Scores close to 100 indicate one enhancement has nearly all influence in the purchasing decision. Scores close to 0 indicate all enhancements have equal influence. Total Attribute 1 Attribute 2 55 Gastroenterologist Attribute 3 Attribute 4 45 Procurement Attribute 5 Attribute ALL QUALIFIED RESPONDENTS Q330 The following are specific hypothetical enhancements to Product X. Please indicate the value of each enhancement relative to the other enhancements by dividing 100 points among them.

13 Streamlined Methodology - Allocation Exercises We use survey allocations to understand previous or expected behaviors. A typical task asks respondents to provide the number of patients on a list of medications over the past year. Allocation exercises allow us to capture the volume of use of certain products as well as the relative difference between product use. Questionnaire Flow Example Reporting Example

14 % of patients tattooed Examples of concise reporting - Allocation Scenario #1 Client does nothing Future Market Landscape Selected Scenarios All Respondents Competitor will enter the market and take 17% share 100% 21% 11% 3% 10% 80% 15% 10% Product D 17% 60% 17% Product C Scenario #2 Client introduces Product Y 40% 77% Generic Competitor will enter the market and only take 10% share 62% 54% Product X 20% Product Y 0% Current Scenario 1 Scenario 2

15 To streamline an instrument, ask yourself Does this question directly address the client s objectives? Can questions be combined for efficiency? Has your org. done surveys in this realm previously? If yes: Who at your org. can you talk to about this topic? What types of questions were impactful for this audience? E.g. of experience leading to asking the right questions: Ask: Price premium for physicians; Don t ask specific $ value in this space Ask: GG for its simple design; Don t ask VWD. Physicians have a hard time answering Show: CMS reimbursement data only to purchasers; Physicians struggle to understand this data Show: Benchmark pricing to gauge premium/ addition $ they are willing to spend; Don t assume everyone knows what the price point should be

16 Streamlining Screener Boosted Response Rates & Engaged Participants Bend but don t break Capture all screener data Only DQ after all screener questions are answered Ask only core screener questions Shorter Screener/ Questionnaire Work closely with panel partners Incidence rate/cost expectations Phrasing of screening questions Good Data & Satisfied Respondents Increased future participation

17 Process: Design Thinking Approach Our clients have many factors to analyze when evaluating a research firm. IbyD is our solution to ensure highly effective communication, robust project management, and consistency throughout the engagement, leading to best-in-class insights that inform decision-making. User-Centered We focus our lens on our clients, their colleagues, and their customers Co-Creative We develop a mutually beneficial, thought-provoking culture with our clients Holistic We formally evaluate our clients objectives from a broad perspective IbyD leverages design thinking principles to optimize the evidence we collect, and thus, our clients confidence in our recommendations. Evidencing We effectively communicate and develop draft and final materials, leading to a better client experience Sequencing We employ our Insight Assurance Process to systematically address all client objectives

18 User-Centered Process: Design Thinking Approach Our clients have many factors to analyze when evaluating a research firm. IbyD is our solution to ensure highly effective communication, robust project management, and consistency throughout the engagement, leading to best-in-class insights that inform decision-making. Talked with Dan and his internal team to confirm that everyone User-Centered We focus our lens on our clients, their colleagues, and their customers was aligned on objectives, study approach, timelines, and deliverables. Co-Creative We develop a mutually beneficial, thought-provoking culture with our clients Holistic We formally evaluate our clients objectives from a broad perspective IbyD leverages design thinking principles to optimize the evidence we collect, and thus, our clients confidence in our recommendations. Evidencing We effectively communicate and develop draft and final materials, leading to a better client experience Sequencing We employ our Insight Assurance Process to systematically address all client objectives

19 Co-Creative Process: Design Thinking Approach Our clients have many factors to analyze when evaluating a research firm. IbyD is our solution to ensure highly effective communication, robust project management, and consistency throughout the engagement, leading to best-in-class insights that inform decision-making. Kept Dan close to key study decisions to ensure voice was User-Centered We focus our lens on our clients, their colleagues, and their customers heard and concerns were addressed. We challenged their Co-Creative We develop a mutually beneficial, thought-provoking culture with our clients Holistic We formally evaluate our clients objectives from a broad perspective IbyD leverages design thinking principles to optimize the evidence we collect, and thus, our clients confidence in our recommendations. assumptions and vice versa to encourage transparent communication. Evidencing We effectively communicate and develop draft and final materials, leading to a better client experience Sequencing We employ our Insight Assurance Process to systematically address all client objectives

20 Holistic Process: Design Thinking Approach Our clients have many factors to analyze when evaluating a research firm. IbyD is our solution to ensure highly effective communication, robust project management, and consistency throughout the engagement, leading to best-in-class insights that inform decision-making. Made sure that the study s objectives were never lost by User-Centered We focus our lens on our clients, their colleagues, and their customers looking at it from a broad perspective. Co-Creative We develop a mutually beneficial, thought-provoking culture with our clients Holistic We formally evaluate our clients objectives from a broad perspective IbyD leverages design thinking principles to optimize the evidence we collect, and thus, our clients confidence in our recommendations. Evidencing We effectively communicate and develop draft and final materials, leading to a better client experience Sequencing We employ our Insight Assurance Process to systematically address all client objectives

21 Evidencing Process: Design Thinking Approach Our clients have many factors to analyze when evaluating a research firm. IbyD is our solution to ensure highly effective communication, robust project management, and consistency throughout the engagement, leading to best-in-class insights that inform decision-making. Shared questionnaire/report drafts and provided fielding User-Centered We focus our lens on our clients, their colleagues, and their customers updates as proof that research was being executed and Co-Creative We develop a mutually beneficial, thought-provoking culture with our clients Holistic We formally evaluate our clients objectives from a broad perspective IbyD leverages design thinking principles to optimize the evidence we collect, and thus, our clients confidence in our recommendations. expectations were set/met. Evidencing We effectively communicate and develop draft and final materials, leading to a better client experience Sequencing We employ our Insight Assurance Process to systematically address all client objectives

22 Sequencing Process: Design Thinking Approach Our clients have many factors to analyze when evaluating a research firm. IbyD is our solution to ensure highly effective communication, robust project management, and consistency throughout the engagement, leading to best-in-class insights that inform decision-making. Process was followed User-Centered We focus our lens on our clients, their colleagues, and their customers systematically to avoid any missteps and prevent any re-work. Co-Creative We develop a mutually beneficial, thought-provoking culture with our clients Holistic We formally evaluate our clients objectives from a broad perspective IbyD leverages design thinking principles to optimize the evidence we collect, and thus, our clients confidence in our recommendations. Evidencing We effectively communicate and develop draft and final materials, leading to a better client experience Sequencing We employ our Insight Assurance Process to systematically address all client objectives

23 Presenting to an Executive Audience "You have 30 seconds to get my attention and tell me what you are here for. If you don't, I'm on my smartphone, and you've lost me." - Steve Blank, founder and former CEO of Epiphany

24 CLIENT RESPONSIBILITIES RESEARCH RESPONSIBILITIES

25 End Results KJT Group was able to provide GI Supply with recommendations on features to prioritize and pricing strategy Easily understood and actionable through clear and concise reporting and well prepared presentations Done in time and on budget via Less resource intensive methods Streamlined screener Efficient questionnaire Following design thinking process

26 Questions?