Pricing negotiations are among the most difficult in business. If not framed in terms of value and differentiation they quickly become zero-sum games, in which what one side wins the other side loses. Poorly handled, they can even become negative-sum games, where both sides lose. How can you make sure your pricing negotiations are win-win negotiations?

There is a lot of noise in the pricing world about how pricing will evolve over the coming years. Some say dynamic pricing will dominate. Others remain focussed on value-based pricing. There is more and more discussion of outcomes or results based pricing. Other people have already begun to speculate about machine-to-machine pricing. People in the Professional Pricing Society’s LinkedIn Group and in the Coalition for the Advancement of Pricing have shared their thoughts. We summarize these here and provide some additional structure.

At Ibbaka, we begin our pricing work by understanding the value of your product or service from the perspective of your customer. Our approach is to research, validate and quantify the economic (monetary) and emotional value your offer creates for the market with customers and non-customers. By understanding your differentiation relative to the customer’s next best competitive alternative, we can design a pricing model built that communicates and even amplifies your differentiation.

Primary research for B2B pricing requires a focus on how the offer creates value for different types of prospective customer and how the customers buy. It is important to combine surveys with interviews and to avoid confirmation bias. Direct questions about willingness to pay (WTP) give misleading results.