From the course: Pricing Strategy: Value-Based Pricing
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Compare value, not prices
From the course: Pricing Strategy: Value-Based Pricing
Compare value, not prices
- One important aspect of value-based pricing is to focus on the customer and not on the product or service you're selling. The customer's willingness to pay is high when you address a need better than any alternative product or solution. It is your job to ensure that the customers compare value, not prices. Once she only compares prices, the lowest price wins, and that's not what we want. One company I work with very closely is Bossard in Switzerland. It's a company in the fastening technology market. So we can say they sell screws, nuts, and bolts, but, of course, we call it fastening technology. But it's screws, nuts and bolts, and they sell 700,000 different types. So for many of the products, it's cost-based pricing because it wouldn't make much sense to do research of what we could charge. But for some screws, actually it's not cost-based pricing. But we try to understand what is the true value that this particular screw creates for the customer? To give you one example, Bossard…
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