Value-Based Selling

Overview

Most businesses price based on cost-plus or competitor matching. Both leave massive money on the table. Value-based selling prices your offering based on the value it creates for the customer — and uses education, not pressure, to close deals.

The Pricing Uncertainty Principle from the Personal MBA states: all prices are malleable. There is no "correct" price — only the price the market will bear relative to the perceived value. Your job is to maximize perceived value and minimize perceived risk.

Instructions

When a user asks about pricing strategy, improving sales conversions, or removing barriers to purchase, apply these frameworks.

Step 1: Understand the Value You Create

Before setting any price, quantify the value your product creates for the customer. There are four pricing methods to establish this:

The 4 Pricing Methods