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Understanding Customer Value Creation and Usage to Determine Price

Understanding Customer Value Creation and Usage to Determine Price

Understanding how a product or service offering creates differentiated value for the customer is the foundation of value-based pricing.  Prices should align with the value the customer receives, thus ensuring the seller is maximizing returns from the customers and target the customers that derive the most value from the offering. These are the customers that will be happiest and most successful, the kind of customer you want to build a business on. For pricing to be effective, it should track the value metric. This is the unit by which the product or service offering is consumed that best reflects how the customer gets value.

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