Carl Lewis invited me to join him on The Connected Enterprise Podcast. We discussed the big deal behind value-based pricing, why it’s crucial for businesses, and how embedding this value mindset right from the get-go makes all the difference. We tackle the tricky bits: figuring out what something’s genuinely worth, getting to know your customers and even the nitty-gritty of research costs.
Key topics we covered in this episode:
- Importance of a value philosophy throughout the organization
- Determining the true value of a product or service
- Need for a deep understanding of the market and customer segments
- Deciding when pricing needs to be fixed or optimized
- Importance of deep buyer elicitation research in pricing
Timestamped Outline
08:46 Value-based pricing requires organization-wide support and a deep understanding of the market.
12:17 Understanding value comes from deep customer conversations.
20:24 Ensuring pricing aligns with goals.
28:58 Reaping the consequences of not monetizing.
Potent Quotables
Pricing Orientation:
“The way I look at those three, the cost-based, competition-based, and customer value-based pricing, is it’s a ladder, and you can’t jump to the end of customer value-based pricing without taking the other rungs on the way there.”
— Dan Balcauski
Optimizing Pricing Strategy:
“Is there a magic number, magic time, at which to change your pricing? Generally? No, I don’t think companies do it often enough. I would say it generally makes sense to revisit it at least once per year.”
— Dan Balcauski
Customer Segmentation and its Impact on Value Conversations:
“One of the fundamental pillars on which I base a lot of my pricing and packaging work is customer segmentation. So the idea would be this sort of expeditionary force is going ahead, having really in-depth conversations, synthesizing that into personas that represent the different customer segments, that help the rest of the team really grasp at a high level.”
— Dan Balcauski