![]() So, the first thing value-based pricing does is enable you to price based on the customer-how much value they see in your offering. Pricing for the dabbler means sacrificing potential profit from the pro, and pricing for the pro means losing the dabbler entirely. The dabbler might spend $100, but $320 just isn’t worth the value he’ll get from it. A customer who plays tennis every second month won’t be half as inclined to spend $320 on your fancy new tennis racket as the pro (who’ll want one in every color). Of course, the amount a customer is willing to pay will be different for different types of customers. Value-based pricing is a customer-focused strategy that involves setting prices based not on your costs or competition, but on your customer’s perceived value of your offering-how much it is worth to them. We’ll also look at which types of company should be considering a value-based pricing strategy and which should not. In this article, we’ll take a deep dive into what value-based pricing really is, the benefits it brings, the drawbacks it presents, and how it’s being used by companies in various industries to maximize profits and revenue. Will it be worth the effort?Īt Pricefx, we’ve spent the past decade helping companies successfully make the jump and we’ve seen how their value-based strategy has delivered incredible ROI, so we thought we’d share some of our expertise in value-based pricing with you. ![]() ![]() ![]() For many, the jump from cost-plus to value-based is just too wide. But actually, adopting it is a different story. The power of a value-based pricing strategy to boost profit and revenue has caught the attention of pretty much every organization. ![]()
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