The value ratio is a critical but frequently overlooked pricing metric. Tracing this metric is critical to your long-term health. Deciding what level to target is one of the most important Where to Play choices you make in pricing.

It is a truism among pricing experts that you should not base your price on your costs. Your costs are your problem, not your customer's. It is up to you to manage costs relative to the value you provide and the customer's willingness to pay. This sounds good in theory, but anyone who has run a business knows that costs matter. They matter a lot. Costs cannot be ignored when one is thinking about pricing strategy.