Pros of value based pricing
1. It provides real willingness to pay data.
Most companies shy away from diving into pricing, because they’re afraid of the process and end up rushing to solve other problems facing the business, because they at least know how to test different landing pages. Yet, even though there’s work involved, value based pricing provides real data that forces you into a profit generating price within your pricing strategy.
Simply put, if done correctly, value based pricing helps you generate the most profit.
2. It helps you develop higher quality products.
Value based pricing not only determines a more accurate price for the end product, but the process will also benefit your business. The heavy emphasis on research is like sweating on a treadmill; not only do you burn off those appletinis (don’t think our CEO, Patrick, doesn’t drink them), but you are also healthier.
Exploring your competition will help you understand the advantages of your product, which is where marketing should focus on, and its disadvantages, the parts that should be altered. Taking on a consumer perspective will also help you discover what clients are really looking for in your solution. Products and features will be driven by consumer demand, which raises perceived value, thereby resulting in a higher price.
3. It allows you to provide phenomenal customer service.
Much of the customer data in value based pricing is collected through customer surveys or interviews. The responses we’ve seen to simply bringing customers into the discussion of value have been extraordinarily positive and appreciated.
This attention to consumer opinions and wants will result in more personable and considerate services. This can be the difference between one time customers and loyal clients who develop a bond with the company and always come back, because they trust you’re providing the value you continue to claim you are in your price.