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Real-world examples of value-based pricing strategies
- Value-based pricing is all about using the perceived value, often also referred to as willingness-to-pay of your customers.
- There are three main ways to define a price point: Cost-based, Competitor-based, and Value-based.
- Value-based pricing is often confused with Outcome-based pricing.
- Examples of companies utilizing the value-based pricing strategy for software product are Notion, Slack, Airtable and Zapier.
- Revenue maximization, maximizing user growth and customer-centricity are the three essential benefits of implementing value-based pricing.
- To implement value-based pricing, product development organizations should gain an understanding of which features/customers value the most and the willingness to pay.
- Then, they should conduct a price sensitivity analysis for each feature of their product.
- After that, they need to create a packaging matrix to analyze which feature is most important.
- For complex products, organizations need to conduct a price sensitivity analysis again for the features that land on the top-right corner.
- Regardless of how your price scales, value-based pricing is the most efficient way to set a price point that’s right for both you and your customers.
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