How much of the value you create can you keep for yourself? What is the optimal pricing strategy?
If you know the value you create for your customers, how much of that value should you try to keep for yourself?
This stage is all about pricing and your revenue model. We start by quantifying the value that we create for our customers from our offerings, comparing our impact versus competitors’, understanding their pricing, and finally deciding the the What and How of pricing: At What price do we set and How do we capture that value through our revenue model?
Value Pricing
In a workshop setting, we bring together key stakeholders from Commercial and Product teams to identify and quantify all the potential value new or existing products/services creates for customers. Does it save our customers time? What is the value of that? Does it reduce their costs? By how much? We then look at competitors and their pricing and finally we decide upon a price we are comfortable with. The next stage is to formulate the pricing communication strategy and essentially get commercial teams to be comfortable with selling the price versus selling by price.
