This one is the King of Hearts from the Selling Value card deck.
It’s true, value-based pricing is impossible because value-based pricing simply means charge what your customers are willing to pay. And yet you don’t know how much your customers are willing to pay. You can’t read their mind. You don’t know the answer and you never will know the answer.
But instead of assuming we’re ever going to get perfect, let’s assume we can get better. We can adopt this as a mindset.
If we’re thinking always about how much is our market, our customer, willing to pay. All of a sudden, we change our thinking from cost-plus, we have to cover our cost type thinking, to, could I get more from this customer? Could I get more from this marketplace? And as we start thinking that way, we also start thinking, can I create products that deliver a little bit more value? Can I communicate my value better to my customers? Can I help my customers, or my buyers, understand that there’s way more value there than they originally thought, and therefore they would be willing to pay us more money?
“Value-based pricing is impossible because value-based pricing simply means charge what your customers are willing to pay. And yet you don’t know how much your customers are willing to pay.”
– Mark Stiving
Once we start to understand and think about how is it that our customers value our products, then we have the ability to price and capture more of that value, meaning more profit to us.
We hope you enjoyed this memecast. This is also an example of how Pricing Table Topics works. Grab a deck of our cards, pull out a random card, read the saying, and then talk for one to two minutes about what that card says. This will improve your understanding and more importantly, your ability to communicate important concepts about value.
If you have any questions or feedback, please email me [email protected].
Now, go make an impact.
Connect with Mark Stiving:Accelerate Your Subscription Business, ask a pricing expert, pricing metrics, pricing strategy