Pricing: From WTF to WTP (Willingness to Pay)

These data contain information about actual transactions and their prices, but do not necessarily offer direct indications of a customer’s true underlying willingness to pay .30 Yet this is precisely the knowledge which is critical for effective price differentiation

“Good pricing has three prerequisites: create value, quantify value, and communicate value,” I said in summary. “That is when you get the price you deserve, the price you need for a profitable business. And, last but not least, avoid price war s.”

Pricing strategy is a key component to disruption.

“Good pricing has three prerequisites: create value, quantify value, and communicate value,” I said in summary. “That is when you get the price you deserve, the price you need for a profitable business. And, last but not least, avoid price war s.”

Although there is a lot of science around pricing, pricing is more art than science. For a great primer, I highly recommend getting a copy of Neil Davidson’s free ebook on software pricing, Don’t Just Roll the Dice.

Price is a story, price is a signal, and price is a symptom of your strategy.