Product management and pricing: floor wax or dessert topping*?

11 06 2009

I’m going to clarify some terms. 
I promise this relates back to pricing and product management.

Art is not a pejorative term

But some people use the word “art” to denigrate anything that they believe has no intrinsic value or lacks a factual basis.

People fear having their work labeled as “art” because it implies that their work is superficial, unrepeatable, and lacks measurable value.  Basically: un-fundable.

Marketing, product marketing, product management, interaction design, and design in general have all tenaciously emphasized the quantitative aspects of their fields in order to avoid having their fields classified as “art” (and therefore irrational and value-free).

And, if all you have met are flighty, self-important, arbitrarily enigmatic, talent-free, damaged hacks that call themselves “artists”, I’d have to agree with you.

However, I was raised with artists.  I live around and with artists.  I am an artist.  I’m also a masters degree chemical engineer.  Real artists take their profession seriously.  It is a job like any other.  They follow a method, they have a craft, and they produce repeatable results.

Art, like computer programming, has a language all its own.  There is a visual language of impressionist painters or filmmakers, a movement-based vocabulary in ballet or acting, and aural conventions in poetry and music.

An artist’s work can capture and represent something ephemeral, even though the answer won’t appear in a quarterly report.  This is no accident.  Barring savants, this skill is derived through a rigorous development and application of technique.

Sound familiar?

Science is not black and white

The term “science” is a crutch that people lean on in order to lend a significant, tangible unassailability to their profession.  The point of calling anything a “science” is to remove any perception of ambiguity and heighten its sense of value – to save it from being classified as “art”.

Many people struggled through “science” (whichever branch) in school.  This might lead people to believe things like:

  • There is always a single, correct answer
  • That answer is always quantitative
  • Science is beyond the layman’s capabilities

Some of that can be true depending on the question.  Scientific principles start as a theory.  Some theories cannot be conclusively proven.

However, once you get far enough in any scientific subject, interpretation and judgment become extremely important – even when you can derive quantitative results.

There is a language, creative flow, and beauty to scientific pursuits.  The application of science to the real world heightens these aspects.

Art is not the opposite of science

The difference is that most people think they can be an artist, and few believe they can be a scientist.  What’s more, some artists see science as their Kryptonite while some scientists have no interest or regard for art (see Tom Stoppard’s Arcadia, act 2, scene 1 for the witty exchange). 

But they are certainly not matter and anti-matter (which artistic-types and science-types both use).  It’s more like antipasto and pasta.  They’re better together.

Art and science both derive from a common reference: the physical world.  Some of that basis can be measured objectively, some cannot.

What about pricing and product management?

In an earlier post, I said “pricing is an art”.  That may offend someone who thinks of I’m jeopardizing their craft by inferring it’s “art”.  I’m saying it’s art, not “art”. 

I see product management as a collaboration of art and science (as opposed to “art” and “science”).

Good product management requires significant emotional intelligence, empathy and intuition in addition to the usual mathematical mindset.  Like it or not, complex systems have unquantifiable elements – even if it’s possible to measure, it probably wasn’t.  That’s reality.

The best product managers (and marketers in general) I know have an artistic and scientific background – even if one or the other is just a self-taught hobby.  It helps them think unconventionally.

Pricing is a great example of the interplay of art and science (the linked article is an excellent discussion of the nuances).  Pricing, like great art, evokes strong emotions from everyone that experiences it.

There are times when pricing is mostly scientific.  In an established market, a derivative product, even if it is new, has a firm pricing basis.  Energy drinks were new at one time, but they still used soft drinks as their basis for setting the market price.

The price of gas is simply a numbers game (what the market will bear without an FTC investigation).  What are people going to do, stop driving?

But pricing can involve significant intuition and interpretation of the unquantifiable.  When you have a new product without any comparables, or if you must totally restructure an existing product’s pricing basis, a product manager must tap into every skill at their disposal.

Pricing is the act of quantifying the buyer’s value perception

You can rely on all the numbers you like, but woe betide the product manager that neglects customer perception

Imagine being chosen to assign a Facebook user-fee.  Or create a per-mile road taxation program.  Or create a single, flat-fare for San Francisco’s BART (or DC’s Metro) system.  Pricing anything more complex than a sandwich requires using both sides of your brain.

The art in pricing and product management comes from tempering the science with an intuitive assessment of your users, buyers, sales force, and market so you can evaluate the impact of your decisions.

 

* Who can resist an SNL reference?

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2 responses

9 07 2009
Pricing, metrics and evolution (#3) « Spackle

[…] metrics and evolution (#3) 9 07 2009 So far I’ve talked about how pricing is a mix of several elements which involve math, science, intuition and emotional intelligence.  At some point, these […]

26 08 2009
Pricing topics round up « Spackle

[…] I also claimed that pricing is a blend of art and science, so you may want to review Product management: floor wax or dessert topping? […]

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