The art and science of pricing | Madhavan Ramanujam (Monetizing Innovation, Simon-Kucher)

**Madhavan Ramanujam** (0:00)
But when we talk about pricing, many people quickly gravitate to like dollar figures. That's just a price point, that's a dollar figure. But when we think about price, we think about it as a measure. Like liter is a measure of volume, price is a measure of value. And when you think of it this way, it really stands for do people actually want your product and would they actually buy it? And that is the whole willingness to pay conversation.
And entrepreneurs and companies need to do this much earlier so that they can understand, you know, are they on the right track?

**Lenny Rachitsky** (0:31)
Welcome to Lenny's Podcast. I'm Lenny and my goal here is to help you get better at the craft of building and growing products. Today, my guest is Madhavan Ramanujam. Madhavan is the author of Monetizing Innovation, the most widely read book on pricing strategy. He's also senior partner at Simon Kucher and Partners, which is the premier consulting agency for companies looking to get help with their pricing. And unsurprisingly, when I asked people on Twitter who the smartest person on pricing is, Madhavan was by far the most mentioned. In this episode, we get deep into all manner of pricing strategy, especially focusing on five lessons for product teams on thinking about pricing. Enough talking, let's get into it. I bring you Madhavan Ramanujam after a short word from our wonderful sponsors.
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Madhavan, welcome to the podcast.

**Madhavan Ramanujam** (3:26)
Thanks Lenny, pleasure to be here.

**Lenny Rachitsky** (3:28)
I am really excited to be chatting. You're kind of known as the smartest, maybe most experienced person on pricing strategy in the world. You literally wrote the book on pricing strategy that everyone seems to read and share and talk about.
And so I'm really honored to have you on this podcast.

**Madhavan Ramanujam** (3:44)
Thanks for the nice words. I'm excited to be here.

**Lenny Rachitsky** (3:46)
To help folks fully grasp the level of experience that you have around pricing and pricing strategy, could you just kind of talk about how many companies you worked with, maybe name some companies you can share, maybe how many people bought the book, anything that you can share by just the level of experience you have in pricing?

**Madhavan Ramanujam** (4:05)
Sure. So I work as a senior partner in a consulting company called Simon-Kucher. So we are the world's largest pricing strategy consulting firm. We have about 2000 employees worldwide in 43 offices. So I work in our Bay Area offices and I've been here for the last 15 years. So I work primarily with tech companies here in the Bay Area. So that's software, internet, marketplace companies, et cetera. So I've worked with over 250 companies, more than 20 unicorns on everything to do with pricing, monetization, profitable growth and these kinds of topics.