Pricing on purpose
Business is defined by the value it creates for its customers. Your price speaks volumes about your value proposition, more so than any other component of your marketing. Yet many firms still do not price on value.
Business is defined by the value it creates for its customers. Your price speaks volumes about your value proposition, more so than any other component of your firm’s marketing. The business world pricing revolution began in the 1980s, when many of the Fortune 500 companies began to employ professional pricers, and organizations such as the Professional Pricing Society were founded to assist companies in achieving excellence in pricing for value.
Value is in the eye of the beholder. For any transaction to take place, both the buyer and the seller must profit from the exchange and receive more value—in their subjective perception—than what they are giving up. Yet many services firms are still defined by “hourly rates.” Their profession has taken its collective intelligence, experience, judgment, education, wisdom, knowledge, and intellectual capital and commoditized them into a one-dimensional hourly rate.
Today, thousands of firms price their services according to the external value created—as perceived and determined by the client—rather than internal costs incurred in generating those services. This article illustrates that pricing by the hour is the wrong way to measure the value created for the client.
read more >>
Business is defined by the value it creates for its customers. Your price speaks volumes about your value proposition, more so than any other component of your firm’s marketing. The business world pricing revolution began in the 1980s, when many of the Fortune 500 companies began to employ professional pricers, and organizations such as the Professional Pricing Society were founded to assist companies in achieving excellence in pricing for value.
Value is in the eye of the beholder. For any transaction to take place, both the buyer and the seller must profit from the exchange and receive more value—in their subjective perception—than what they are giving up. Yet many services firms are still defined by “hourly rates.” Their profession has taken its collective intelligence, experience, judgment, education, wisdom, knowledge, and intellectual capital and commoditized them into a one-dimensional hourly rate.
Today, thousands of firms price their services according to the external value created—as perceived and determined by the client—rather than internal costs incurred in generating those services. This article illustrates that pricing by the hour is the wrong way to measure the value created for the client.
read more >>
