Home – New Forums Money matters Value based pricing Reply To: Value based pricing

  • Total posts: 842
FS Forum Support, post: 208473 wrote:
1) You have to be able to show that the value to them is far above the cost. Maybe 5x maybe 10x. This is to account for the risks involved for them (you may not deliver what you promise, or you may deliver the service but they may not profit as much as expected, for example).

2) To do this you need to understand how their business makes money, and how your service will translate into more profit for them (and communicate this with crystal clarity).

I’m just trying to think how this would work in practice. So for a potential customer, do you
a) Ask for their specific business information e.g. sales, margins
b) talk in generalities .e.g. companies who do X find that their sales rise by Y%?

edit : obviously not option (b) as you have to know the worth, but it still leaves the question of how to estimate the increase in value to the customer