Tag Archives: customer-value

Unraveling customer-value based pricing: resolving the resistance

Sustained profitability lies in understanding sources of value for customers. For that reason, it is only suitable that the value a product delivers to the customer should be the main factor for setting prices. Cost-based and competition-based methods of pricing are outdated and customer-value based pricing is now recognized as the best working approach (Ingenbleek et.al., 2003). Though, it appears that only a minority of companies (17%) have implemented this type of pricing strategy, despite the apparent benefits. One benefit example is that research shows that customer-value based pricing is positively correlated with new product success as there is a direct link with the customer needs (Ingenbleek et. al., 2003). Especially in the current market environment, where it is difficult to have a differentiating position, obtaining such an advantageous pricing position can be crucial to help you go a long way.

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