THE VALUE & PRICING BLOG

The latest stories, blog articles, and pricing news from the Ibbaka team

Steven Forth Steven Forth

Usage-based pricing a complement and not a substitute

Usage-based pricing is one part of value-based pricing but it is not the whole story. Recent research from the Subscribed Institute finds that usage-based pricing has the biggest impact on revenue growth when combined with other pricing metrics. Why is this? We look at why usage-based pricing drives higher growth up to a point, and why an excessive reliance on usage-based pricing can slow growth.

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Steven Forth Steven Forth

Why Value-Based Pricing means something

Value based pricing is widely misunderstood. Some people think it can be reduced to willingness to pay (WTP). It cannot. In a recent LinkedIn post Robert Ribciuc asked nine rhetorical questions about value based pricing. We answer them here.

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Steven Forth Steven Forth

What gets measured gets managed - How to measure your pricing

There is an old saying “what gets measured is what gets managed.” Most companies do not do a good job of managing pricing. Is that because they do not measure it? What aspects of your pricing performance should you be measuring? How will those measurements help you to manage pricing? We conclude with three critical measures you need to get started.

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Steven Forth Steven Forth

Your pricing model needs a value model

Most companies have moved from having a price to having a pricing model. This is a necessary step towards the next generation of pricing excellence. But a pricing model without a value model is adrift. It does not help align the value to customer (V2C) to the price. It is only half the story. Effective pricing strategy requires that we connect a value model to a pricing model.

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Steven Forth Steven Forth

How to use indexed pricing as the economy recovers from the pandemic

The economy will emerge from the pandemic at different times and speeds depending on sector and geography. This will be a tactical challenge for most pricing experts and it will be easy to make mistakes and get your timing wrong. A solution is indexed pricing. Demonstrate that you understand your customer’s business by usinng indexed pricing.

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Steven Forth Steven Forth

From willingness to pay to ability to pay (managing pricing in a time of uncertainty)

Willingness to Pay (WTP) is one of the most popular ideas in pricing. Many software packages or consultants will tell you that they can calculate your customer’s willingness to pay and use that to set prices. What happens when willingness to pay collides with ability to pay? Or when there is compelling community need that transcends either.

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Steven Forth Steven Forth

What pricing actions are being taken in response to COVID 19?

“Everyone has a plan until they are punched in the face.” Mike Tyson famously said. Many of us feel like we have been punched in the face and are scrambling to respond and not react, adjusting our pricing, applying discounts and changing terms of trade on the fly. Willingness to pay has been replaced by ability to pay or even interest in paying. Let’s share how each of us are responding.

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Pricing Design, Targeting, Best Practices Steven Forth Pricing Design, Targeting, Best Practices Steven Forth

Pricing strategy changes across the technology life cycle

Pricing has important transition points across the technology adoption cycle. How you think about value and use it to shape your pricing strategy changes as your buyer’s motivation changes. It is critical that leadership, investors, product and services managers and marketing understand these transitions and price products or services appropriately for them

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Changing your pricing metric can change willingness to pay (WTP)

Willingness to pay (WTP) is one of the most frequently abused concepts in pricing. Many people try to use it as a proxy for value. It is not. Other companies claim they can estimate willingness to pay through surveys. This is too simplistic. Why?

Willingness to pay is determined by framing and by the value delivered to the customer relative to the alternative. To measure willingness to pay without taking these into account is wasting an opportunity to really understand your customers and position the value you are providing.

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