What to charge for something without comparison.
WHY IT IS DIFFICULT
There is no established reference price.
WHAT TO ESTABLISH
What the customer currently spends on the problem What the solution is worth to them What it costs you to deliver
WHY VALUE FIRST
Cost sets the floor, not the price.
WHAT TO CALCULATE
The value: money saved, revenue enabled, risk avoided, time recovered.
WHAT TO PRICE AT
A proportion of that value.
WHY A PROPORTION
The customer must gain more than they pay.
WHAT TO ESTABLISH
Cost to produce and deliver, including support.
WHY SUPPORT
New products generate substantial support that is not costed.
WHAT TO AVOID
Pricing on cost plus a margin.
WHY
It ignores value entirely and it usually prices too low.
WHAT LOW INITIAL PRICING RISKS
Establishing a reference the market will not move from Attracting customers who leave when prices rise Signalling low value
WHAT TO CONSIDER INSTEAD
Launching at the intended price with limited early availability.
WHAT TO TEST
Whether people pay.
HOW
By asking for payment, not for opinions.
WHAT TO ESTABLISH
Different prices for different segments, where the value differs.
WHY
The same product is worth more to some customers.
WHAT TO BE PREPARED FOR
Being told it is too expensive.
WHAT TO ESTABLISH
Whether that means the price is wrong or the value was not explained.
WHY IT MATTERS
They are different problems with different solutions.
WHAT TO REVIEW
Price, once you understand actual usage and value delivered.
