July 10, 2024

Will value pricing work for me?

Lots of folks ask me:

Does value pricing work for $thing?

...where $thing equals stuff they’re currently selling.

The answer is:

You CAN technically use value pricing to price any product or service, BUT in practice, you might not like the result.

Why?

Because value pricing cuts both ways. It’s not a license to charge whatever you want.

The core premise of value pricing is that you can’t set your price higher than the value to the buyer.

In fact, you’d normally charge only a fraction of what your solution is worth to the buyer.

So a better question might be:

Is value pricing the best way to price $thing?

Value pricing works best when there is very high value to the buyer and very low cost to the seller.

IF your ideal buyers don’t place much value on what you do, OR what you do is very expensive to deliver, THEN a different pricing approach might be more useful.

Yours,

—J

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