Value based Pricing
Value-based pricing is a pricing model defined by a simple fact of capitalist life: A product costs as much as people are willing to pay for it. Leveraging the strategy is a matter of understanding where that phenomenon leaves your offering and leaning into how consumers perceive it. Meaning: Value-based pricing is a pricing strategy used by businesses to charge products and services at a rate they believe consumers are willing to pay. As opposed to calculating production costs and applying a standard markup, businesses instead gauge the perceived value to the customer and charge accordingly . Artwork, cars, amusement parks, and even social media influencers use value-based pricing to sell their products and services. All three of these industries take into account a few standard truths about value-based pricing: 1. The market influences how much a consumer will be willing to pay for a product. 2. ...