Pricing products and services according to value is certainly a worthwhile effort. Implementing a value based pricing strategy results in more profit margin and more sales as prices are set to their optimal point. However, pricing to value cannot stop with pricing alone.
Prices set to value are meaningless unless they are supported by marketing, sales and product development.
Marketing is charged with understanding what customers value and creating messaging to support product and service benefits aligned with customer value. And, specifically, economic value. When products deliver higher revenue, reduced costs or reduced risks to customers it is critical that our messaging is on point with these benefits. Provide the economic gain that customers will realize from these products.
The sales team also has a critical role in your value pricing strategy. They are the last line of defense on prices and are charged with communicating the economic value to customers. No room for price discounting here. Equip your sales teams with value based negotiations using value based selling techniques to hold the line on price and margins. (Download our free value based selling guide: “How to Turn Your Sales Team Into a Profit Engine.”
Finally, use your understanding of customer value to make decisions on product and feature investment. Product development can be initiated by creating a value profile and then validating against customer experience.
In the end, a value pricing strategy will ideally result in a broader approach of overall value management. Contact one of our Price Point Partners pricing experts for a free consultation and find out what your first steps should be in order to successfully adopt a value based pricing strategy. Call 330-342-0923 or submit a request to be contacted through the website here: http://pricepointpartners.com/pricing-consultant