A repository of acronyms, jargon, and useful definitions perfect for eCommerce founders & marketers like yourself.

Value-based pricing

Value-based pricing

It is very important to make your customers feel happy about the money they are spending and that is what Value-based pricing is all about. Value-based pricing means pricing your products to a price that your customers feel that they are getting the value for the price they are paying. 

In simpler terms, when you price your products according to the value that your customers find them worth, you price them based on their value to your customers. Value-based pricing is very effective in creating a user experience for your customers that meets their expectations. It also helps you in deepening your relationship with your customers and strengthening your brand name. Value-based pricing not only is a winning opportunity for a customer, but it is a winning opportunity for a seller. 

While executing value-based pricing, you charge your customers according to the value that they receive from your product. It makes the customer happy about paying for what he is getting in return and a happy customer will always return to your website to buy again. Value-based pricing helps you in retaining your customers and thus has a positive impact on your revenue as well. 

The price of your product is governed by its value and you can always communicate with your customers to know how much they are willing to pay for your products, and using this information you can price your products according to their value. The reputation of your company also plays a big role in the value-pricing of your products i.e when a customer buys from a company that is very popular and has a strong brand name in the market, he is willing to pay more for the product because the brand name increases the value of the product for him. 

Value-based pricing is not just about pricing your products, it is about finding an attractive pricing approach that can help you attain high profits. 

Types of Value-based Pricing 

There are two types of value-based pricing:

  • Good-value pricing offers the perfect combination of quality and service at a reasonable price 
  • Value-added pricing adds value-added features and functions to highlight  an offer which makes customers pay higher rates
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