Value-based pricing strategies

Value-based pricing sets prices according to the perceived worth of your product to customers, not your costs.^[1] This approach focuses on the outcomes and benefits users gain rather than features or production expenses. It often results in higher profit margins when executed well.

To implement value-based pricing, you need deep customer understanding. What problems does your product solve? How much money or time does it save them? A project management tool that saves a team 10 hours weekly might justify premium pricing based on that time value. The key is quantifying value in terms customers understand.

B2B products often translate this to ROI, while consumer products might emphasize convenience or status. Regular customer interviews and willingness-to-pay studies help refine you value proposition and pricing.