New Forest

16/11/2017

Value Based Pricing

A value-based pricing strategy is one which sets prices primarily, (but not exclusively), in line with the perceived or estimated value of a product or service to the customer rather than according to the cost of the product or historical prices.

Value-based pricing is not about racing to the bottom along with your competitors. It’s all about knowing your product or service’s value, understanding what you’re really selling, and being able to effectively communicate that value in a way that puts your cost into perspective.

The best brands price their products and services on the basis of what they think people are willing to pay. For example, Apple produces iPhones quite cheaply however the company knows that loyal customers are willing to pay a premium for the latest handsets. As such, they price the latest versions at a premium and enjoy better profit margins as a result.

If you want to charge more than your nearest competitors, you need to be able to differentiate your product or service in some way. For example, your firm might offer better customer service.

So, in order to create a value-based pricing strategy in your business, you need to be inquisitive. You need to ask your customers better questions, and make them feel like you understand their world. You need to listen to what your clients really want and respond to those requirements.

If you can build this into your product or service offering, you should be able to develop a pricing model with a better profit margin while simultaneously keeping your customers happy.

For further information on Value Based Pricing, please contact Alan Williams on 023 8046 1201.

Latest Tweets

HWB has an exciting new opportunity to recruit a diligent, organised and motivated person to train as a Marketing Assistant.

Click the link to read more 👉 https://bit.ly/2N8sjO8

The budget for schools will be increasing by £2.3bn next year & £2.3bn the year after - taking the core schools budget to a total of £58.8bn.   

This will help to deliver the best education for young people & prepare them for their future careers. #AutumnStatement

Let’s Talk

Why not arrange a FREE consultation and find out what we can do for your business.