“Value-based pricing strategies must lead with customer value, not product value”

I frequently get the question on value-based pricing during my interactions with startups.

As we start getting deeper into their pricing strategy, I eventually end up asking this question ” Have you got the definition of value in the term “value-based pricing” incorrect?”

I usually see the founders being very excited about their products and the value of the product (Product value). But we start discussing what value customers will derive from the product, I usually find the responses lack depth and clarity.

Value-based pricing is all about interacting as much as possible with the customer and understanding the value they derive from the product or their willingness to pay for the product.