Pricing Strategy Fundamentals: How to Charge for Value Created

Pricing is defined as how a product makes money. The core principle is to align how you charge with how customers use your product to create value, increasing revenue as customers realize more value.
Basic pricing components include Monetization (how value is captured), the Value Metric (how you charge), and Price Points (the amount charged). Additional components involve packaging, bundling, licensing, and channel economics. The strategy is revealed by understanding customer pain points, usage patterns, and value preferences.
The process starts with analyzing Customer Value (pain points, desired outcomes, usage), which informs the Monetization Model (e.g., subscription, usage-based, outcome-based, hybrid) and the Value Metric. The Value Metric, more important than the price point, should align with value and meet criteria like being measurable and scalable. Price Points are set using inputs like willingness to pay and usage patterns. Customer discovery (interviews, surveys) is key to understanding preferences and willingness to pay.
Monetization and product strategy are inextricably linked. Effective pricing aligns with customer buying criteria, sales conversions, differentiates offerings, incentivizes desired behaviors, and supports company goals.

Видео Pricing Strategy Fundamentals: How to Charge for Value Created канала Peter Giordano