This one is the Queen of Hearts from the Impact Pricing card deck.
Value-based pricing has many different meanings. Different people use it differently. Oftentimes, it’s used to say, what’s the value of each individual feature that’s different between your product and your competitors, and add that to your competitors price. And by the way, that’s a great way to think about value and value-based pricing.
But the easiest definition I’ve heard of for value-based pricing is, charge what your customers are willing to pay. And I love this definition because sure, it takes into account the fact that we sometimes have competitors. And we want to know what’s the value of our differentiation relative to our competitors’ products.
“The way to think about it [value-based pricing] is, how much is a customer willing to pay because that’s how much they value your product.”
– Mark Stiving
Absolutely, these are crucial things for us to know. But we also get to discover, what happens if they’re not considering competition at the time? Or, what happens if it’s raining and we want to sell an umbrella? So, these differences in time, differences in use cases, these things all have impact in how our customers value our products. And likewise, how much they would be willing to pay for our solutions to their problems.
So, I love this concept or this idea that says, look, we all want to charge based on how much value our customers are getting. That would be value-based pricing. But the way to think about it is, how much is a customer willing to pay because that’s how much they value your product.
We hope you enjoyed this example of Pricing Table Topics. What you just heard was done without a script. If you want to get better at speaking about pricing and value, grab a deck of our playing cards, pick a card, read the saying, and talk for one to two minutes about what that card says. You’ll become a better speaker and expert. By the way, you can also play card games.
If you have any questions or feedback, please email me, [email protected].
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