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Also known as: value pricing, outcome-based pricing

Value-Based Pricing

TechnicalStrategiesFinance

Definition

Value-Based Pricing: Value-based pricing sets prices based on the perceived value to the customer rather than cost or competitor pricing. This approach requires deep understanding of customer outcomes and willingness to pay. When done well, value-based pricing captures more revenue while maintaining customer satisfaction.

Example Usage

“We price based on revenue influenced, not users. Customers generating $1M through our platform happily pay $50K/year because the ROI is clear.”

Common Misconceptions

Just charge more. Value-based pricing requires understanding and communicating specific customer outcomes.
Value is the same for all customers. Different segments perceive different value; price segmentation matters.
Competitors set your price ceiling. If you deliver unique value, you can price above competitors.

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