In the process of developing a value based pricing strategy, we first must understand what the customer perceives as value. Every buyer and every company is different. Even though you may be selling identical products or services to similar companies in identical markets, each has a different spin on what they value. The key is to determine precisely what they value and how the buyer will measure the value of your offering.
Digging out what buyers truly value requires asking a lot of questions. It means having a lengthy and deep dialogue with the buyer to understand their motivations for buying now. Don’t assume that you already know what they value. We often hear buyers focus on price and we can be easily led to believe that price is the only important buying criteria.
Our pricing consultants have conducted research with thousands of buyers in a wide variety of industries to determine what they really value. Price is typically ranked third or fourth behind quality, delivery and service. Remember that buyers are rewarded to reduce costs.
We find that buyers actually want to talk about what they value. They typically respond well to the salesperson who wants to know what is important to them in making a buying decision.
While the actual questions you will ask the buyer will need to be customized for your products and markets, the following are seven key questions to help you get started:
The objective is to get the buyer to paint a picture of success. Once you can clearly see this picture, you will be able to synchronize your value offering to the buyer’s needs. Remember that the goal is to quantify your value offering in dollars and cents. This will position you very well when you are later faced with price negotiation challenges.
Price Point Partners is a team of senior-level pricing experts dedicated to solving the pricing challenges of manufacturers and distributors. Contact one of our price consultants to discuss your pricing challenges at 330.342.0923 or use our contact form and we’ll get right back to you.