Emotional and economic value drivers are both important in market segmentation and pricing design. This is especially true where goods like water is involved. WaterTrax (part of Aquatics Informatics) has been thoughtful and effective in designing its pricing.

Ibbaka is a value-based pricing company. To do value-based pricing, one has to ask who the value is being created for. This impacts everything from product and services deign, to pricing to communication and sales strategy. A holistic view of value and stakeholders can transform how one thinks about pricing.

We see a lot of b2b market segmentation in our work. Often these are the weakest part of the marketing plan. Many segmentation is typically limited to firmographic data and in some cases are simply a list of industry verticals. They are meant to find a market that fits the offer. Instead, we should segment based on emotional and economic value creation to build an offer that fits a market.

Innovation is only sustainable if part of the value can be captured in price. How does your organization price innovations?

Price elasticity of demand and cross-price elasticity interact in important ways. Learn how these two critical determinants of demand interact and how this conditions your pricing strategy.

Customer centricity as defined by Peter Fader is emerging as a strong alternative to product led strategies. To win with this strategy you need to pay close attention to customer segmentation and then price with an eye on the value you create for your best customers.

Ibbaka is focussed on the pricing of innovations, so we get to see a lot of innovative organizations. One thing we study is how organizations are designed to support agile and sustained innovation. Here is an example of one organizational design pattern that works

Pricing transparency and fair pricing are becoming hot issues. Buyers want to believe their pricing is fair and reflects the value they receive. What does it mean for pricing to be fair and how do you communicate fairness?

While appealing to emotions may seem intuitive within the B2C environment, there are often questions around whether emotional value creation really matters within the B2B environment. That is, is there room for emotions if it is “just business”?

Pricing models are how you structure the pricing of your product or service. It is where all the different aspects of your pricing strategy and tactics come together. Here is a simple primer on pricing models and how to build them.

In many industries the pricing metric and even pricing levels are frozen accidents. They were established in the past for reasons no longer known and endure through convention. Look at your pricing and ask questions. “Why this pricing metric?” “Whose interests does this pricing metric serve?” “How does pricing shape profit pools?” Pricing’s past does not need to determine its future.

Many companies struggle with pricing alignment without even being aware it is an issue. In some cases there is confusion on goals, or perhaps too many goals. In other cases the different parts of the organization are pulling in different directions. You can get insight into pricing alignment at your company by having different people take a pricing self assessment and comparing the results.

The CEO should play a leading role in pricing strategy and demand a high level of execution. Pricing is too important to leave to experts. It is one of the most powerful strategic levers a business has. What are the ten top questions a CEO can ask to help improve pricing practices at their company?

Tom Nagle basically defined strategic pricing, developing the core ideas and frameworks used today to understand differentiation value, construct a pricing strategy and execute on pricing in the field. Ibbaka spoke with him about the skills needed for pricing expertise.

Willingness to Pay (WTP) is one of the most popular, and slipperiest concepts, in the pricing world. Three key things to remember: (i) WTP can be shaped, it is not a given, (ii) WTP is a distribution and not a point, (iii) the shape of the WTP distribution impacts your pricing strategy.

Even if you have a highly differentiated, value-added offer and are able to charge a premium without much customer pushback, your pricing should not aim to recoup the full value you create for your customers. Your price should leave a consumer surplus - that is, the customer should feel they are getting more value than the amount spent, as value perception is key to the sustainability of any good pricing.

Applying systems thinking to your business can help you see how the different parts reinforce each other. In The Amazon Way on IoT consultant john Rossman describes this as the flywheel. Design your pricing to make sure that flywheel keeps spinning and building momentum.

Good pricing design will encourage users to adopt tha behaviors that will create the most value for the user. Over the long run, that is what will build differentiation value and increase pricing power for the vendor. BJ Fogg and Nir Eyal provide models for how to do this.

In the Sixth Edition of The Strategy and Tactics of Pricing, Tom Nagle and Georg Muller introduce the Value Cascade. This is a powerful framework for identifying value and pricing leaks. Use it to ask yourself hard questions about how you create, communicate and capture value.

Pricing strategy and design work inevitably includes a lot of numbers. Too often, we focus on the numbers describing the numbers, averages, medians, standards of deviation. In most cases, the shape of the distributions is as important as the absolute values.