Translate customer value into an offer whose delivery and economics can be explained.
Your learning outcomes
Compare business models and charging units
Calculate contribution using explicit assumptions
Connect pricing, service scope and customer value
CLASS 5.1 / 60 MINUTES
Design the offer and charging unit
Define the complete offer
Customers buy an outcome supported by a set of responsibilities, not simply a technical component. Describe the hardware or software, installation, training, support, updates, exclusions and response expectations. State which party owns the operating task and which services require separate agreement. SignalBox could be sold as a device, a subscription, a managed service or a partner-supplied capability. Each option changes delivery work and risk. A clear offer helps the team test willingness to pay without leaving the customer to imagine a much larger service.
Choose a charging unit people understand
Pricing can attach to a site, machine, user, licence, transaction or outcome. Evaluate how the unit relates to value, cost, predictability and verification. A usage charge may align with costs but create anxiety about an unknown bill. An outcome fee may sound attractive but depend on a disputed counterfactual. Use discovery to understand budget structures and purchasing preferences. Do not select a charging unit merely because a competitor uses it; test whether it fits your customer's workflow and your ability to measure it fairly.
Compare model implications
Create a model table covering revenue timing, delivery obligations, customer commitment and required capabilities. A one-off sale can still require warranty or support work; recurring revenue can still include cancellation and collection risk. Licensing transfers some activities to a partner but creates negotiation and oversight tasks. Separate the commercial model from the payment schedule and the accounting treatment. Those details may need professional review. Choose a provisional model and list the evidence that would change it before investing in billing or contract infrastructure.
PUT IT TO WORK
Your activity
Describe three possible offers and charging units for SignalBox. Identify the service obligations and customer concerns associated with each.
Produce this
A one-page offer specification and business-model comparison.
CLASS 5.2 / 60 MINUTES
Calculate contribution without hiding costs
Start with a defined period and unit
Unit economics examines the revenue and attributable cost associated with a clearly defined unit over a stated period. Specify whether the unit is a device sale, customer month or installation. In a fictional example, a customer pays £100 per month and direct delivery costs are £40, leaving £60 before fixed overheads and other omitted costs. These are teaching assumptions, not market prices. The calculation is useful only when the definition is consistent and the reader can see which costs are included or excluded.
Include costs that grow with delivery
List equipment, cloud usage, third-party licences, payment fees, installation travel, onboarding and variable support where relevant. Allocate shared costs carefully and avoid treating founder time as permanently free. Separate an early prototype cost from an expected repeatable cost, with evidence for any proposed reduction. A positive gross contribution does not prove the company will be profitable or cash-generative. It provides one piece of a broader model that must also include fixed costs, acquisition effort, working capital and the timing of receipts and payments.
Test the fragile assumptions
Run sensitivity for support effort, usage, failure rates, refunds and retention. A small change in a frequently incurred cost can matter more than a speculative increase in price. If estimated contribution becomes negative for a plausible customer, reconsider scope, charging unit or delivery method before selling widely. Do not hide unattractive customers inside an average. In the running case, remote monitoring may appear economical until site visits are included. Model that scenario explicitly and design a pilot to measure the actual support demand.
PUT IT TO WORK
Your activity
Build a unit model for one offer using invented but labelled assumptions. Show a central and high-support case and identify omitted costs.
Produce this
A contribution worksheet with definitions and sensitivity.
CLASS 5.3 / 60 MINUTES
Test price and value responsibly
Investigate the purchasing context
A price discussion should explore the current budget, approval process, cost of the problem and the alternatives available. Avoid leading with a claimed saving that the customer has not verified. Ask how an expenditure of this type is evaluated and who must approve it. Different stakeholders may value reduced downtime, simpler reporting or easier maintenance scheduling differently. Record the evidence behind the value proposition. A willingness-to-pay statement is useful, but it is weaker than a real decision made under ordinary commercial conditions.
Separate price tests from commitments
A price test might compare clearly described offers, seek a budgeted pilot or observe a normal purchase process. Explain when an offer is hypothetical and avoid creating accidental commitments. Do not imply discounts or availability that the team cannot honour. If a customer accepts only because of exceptional support or a founder relationship, record that condition. The purpose is to understand how price, scope and risk interact, not to collect a single number that can be reused as proof of demand in every segment.
Make the value case auditable
Write the value case as a set of assumptions and observable effects. Distinguish customer benefits from your revenue and avoid counting the same benefit twice. Include adoption and switching effort. If the value depends on preventing an event that rarely occurs, explain the uncertainty rather than promising a guaranteed saving. Keep claims consistent across proposals, the website and the product. A coherent offer is easier to sell and support because the customer can understand what is included, how success is judged and what remains their responsibility.
PUT IT TO WORK
Your activity
Draft a price-research script and a customer value worksheet. Include one scenario in which the product is not worth buying.
Produce this
A pricing test plan and a balanced value case.
MODULE ASSIGNMENT / SELF-REVIEW
Build the evidence.
Specify an offer, select a provisional charging unit and build a contribution model with central and downside cases. Propose an ethical test of price and purchase behaviour.
Assignment self-review rubric
Criterion
Points
Clear offer and responsibility boundaries
25
Cost completeness and consistent units
30
Sensitivity and limitations
20
Credible price and value experiment
25
Use the rubric to evaluate your own work or ask a suitable mentor. Written assignments are not uploaded or automatically marked.