How to calculate and implement value-based pricing
You probably get the drift by now, but you need to collect a lot of data for value-based pricing.
Here’s exactly what you need to do:
1. Identify and analyze buyer personas
Buyer personas are a fictionalized representation of your ideal customer. Your product will most likely fit the needs of many different types of customers, which means you should create multiple buyer personas. You can define your buyer personas by thinking about their personal background, role in the company, daily challenges, expectations from leadership, etc. Once you have defined buyer personas, talk about them as if they are real people in meetings.
2. Survey and talk to your customer base
Value-based pricing is from qualitative and quantitative data. Collect customer data by surveying customers on how much they would pay and which features and benefits they value most in your product. Buyer personas come into play here because your surveys need to target a specific audience. Sending out surveys to a random sample of people won’t result in quality data. One thing to keep in mind, since people are taking time out of their day to answer the survey, keep it short and simple.
3. Analyze data to build tiers and bundle packages
Once you have all this data, put it to good use. Analyze the patterns, features, benefits, and price points your different buyer personas value in your product. Create tiers and pricing packages based on these patterns. By offering a range of packages in your pricing plan, you appeal to a greater audience, at the same time as giving yourself the opportunity to upsell to clients further down the line.
4. Test and review
Pricing is a process. You need to test out this data and strategy before it’s totally implemented. Consider trying it out on a small selection of clients first, before applying it to your entire client base. If it doesn’t work, then go back to the drawing board. Not getting it perfect the first time is normal, but just proves how hard this process can be.