PricingBrew

Insights & Tips

Already a subscriber? Login

Become a subscriber and unlock an information arsenal focused on making your pricing efforts more effective.

Why Pricing People Can’t Do Value-Based Pricing

As you might imagine, we get a lot of questions about value-based pricing. For the last decade or so, there’s been so much hype around the concept that it now seems like a required pursuit for every self-respecting pricing person.

On one hand, it’s hard to argue that is a bad thing. After all, the benefits and virtues of value-based pricing are certainly worthwhile. But on the other hand, all of the hype has contributed to a host of misconceptions and unrealistic expectations.

To help Journal subscribers gain more clarity on the topic, I recently had the pleasure of interviewing Stephan Liozu, a well-known thought leader in the pricing community and a prolific author on the subject of value-based pricing.

In our hour-long conversation, Exposing the Truth About Value-Based Pricing, Stephan was able to cut through all of the hype, dispel a number of common misconceptions, and clearly describe what the practice of value-based pricing actually entails.

And here’s one nugget that may surprise you: Pricing people can’t actually “do” value-based pricing. At least, they can’t pursue it effectively on their own.

As Stephan makes clear, real value-based pricing is about more than the numbers or the pricing “labels” that are ultimately delivered into the marketplace. To gain the level of customer knowledge and competitive insight necessary to even begin to contemplate the final prices requires lot of homework. And this prerequisite homework is best performed in collaboration with your marketing, product, and sales groups.

While it might be nice, comforting, or even convenient to think of value-based pricing as some sort of panacea that the pricing team can pursue on its own, that’s just not realistic. As Stephan says early on in our discussion, “Value-based pricing is much more than a pricing strategy. It’s a go-to-market strategy.” And an effective go-to-market strategy simply cannot be developed in isolation, by one functional silo.

So if you’re thinking about pursuing value-based pricing…or wondering why your current value-based pricing efforts aren’t getting anywhere…I encourage you to listen to Stephan’s interview. It may not be the sunshine and roses you’re hoping to hear about, but it is the truth.

Get Immediate Access To Everything In The PricingBrew Journal

Related Resources

  • Advancing Your Career in Pricing

    There's never been a better time to be a B2B pricing professional. But when it comes to your career, you can’t just hope that good things will happen in the future. In this on-demand webinar, learn how to take charge and make good things happen.

    View This Webinar
  • How to Avoid Pricing Panic

    How should you respond when something disruptive happens in your market? How do you avoid overreaction? How do you balance speedy action with smart action? And how do you prepare for the next disruption?

    View This Webinar
  • More Effective Cross-Functional Pricing

    Pricing in a B2B environment is cross-functional by nature. In this on-demand webinar, learn about improving overall pricing performance by working more effectively with other groups and departments.

    View This Webinar
  • The Pros & Cons of B2B Pricing Strategies

    The conventional wisdom around pricing strategy often fails to make clear that some of the "standard" options are extremely dangerous in B2B environments! In this on-demand webinar, learn which pricing strategies actually work...and which ones will destroy your margins.

    View This Webinar