Value pricing is a combination of two skills, identifying value and setting a price. That may sound oversimplified, but really those are the two core components. Everything else builds off or complements those two things.
Identifying value is having a conversation with the customer to learn what is important to him. It is asking questions to uncover the “why” behind the “what”. A customer does not intentionally hide the why. Most of the time he simply needs help to figure it out himself.
It is ironic that the very thing that is so important to him is frequently hidden or shadowed. Part of the joy of serving the customer is taking him on this journey, a value quest. By asking insightful questions, you get to engage the customer in a search for hidden treasure.
The Treasure Hunt
This treasure is the guide to how you can serve him — help him discover what he really needs, not just what he wants. The ability to ask a question and then follow it with another is essential to uncover the real value. And when you find the real value, then you can make an impact.
The impact will take a different form with each customer, yet the outcomes will have one thing in common. The customer will be in a better position after working with you than when he started. If you can do this consistently, then your pricing skills will develop over time.
It is fitting that I spent most of this article talking about value, rather than value pricing. It is more about the value than the pricing. Yes, you need to develop pricing as a core competency. But by focusing on value, you focus on serving the customer, aligning your interests with his. And with this alignment, pricing will follow.
Pursue value and pricing will follow.
Question: How much do you focus on creating value for your customer? You can leave a comment using the form below.