Value Pricing

Companies that implement value pricing, benefit from fully incorporating:

1️⃣ Value Proposition Development
This is a promise to deliver value. It is a clear statement that:
⭐️ Explains how your product solves your target customers’ problems
⭐️ Delivers a specific set of benefits
⭐️ Tells your target customer why your solution is better than alternatives

2️⃣ Economic Value Estimation
This quantifies the monetary value that is created by your offering to your target customer vs. their next best alternatives. There are 3 elements:
🔹 Competitor reference value – this is the price the customer actually pays for the alternative
🔹 Positive differential value – this is the monetary value to the customer of the unique benefits they receive from your offering
🔹 Negative differential value – this is the monetary value to the customer of the unique benefits they receive from the competitor’s offering

3️⃣ Strategic Pricing
This is about building a foundation for long-term profitable growth. The objective is to price more profitably by understanding, creating, communicating and capturing value within the constraints of the competitive environment, company costs and organisational capabilities.

Are you pricing to capture more value?