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Price on Value, Not Just Convenience

Price on Value, Not Just Convenience

Are you capturing what customers actually gain, or settling for what’s easy to sell?

Last updated on July 31, 2025

Price on Value, Not Just Convenience

Are you capturing what customers actually gain, or settling for what’s easy to sell?

What this is for

Shifting from cost-plus or convenience-based pricing to value-based positioning so you charge in proportion to the outcome your customers care about—and stop leaving easy profit on the table.

What you get

  • A clear method to surface the real value your offer delivers
  • Pricing and messaging tied to customer outcomes
  • Segmented value propositions for different willingness-to-pay profiles
  • Tests to validate and defend higher pricing without friction

Core logic

Customers pay premium when price reflects the impact or savings they receive—not simply how convenient something is to buy or deliver. Value-based positioning forces you to speak in the language of outcomes (e.g., “$5K in retained profit,” “2x faster growth,” “risk cut by half”) and align your price to a fraction of that perceived return.

Step-by-step

  1. Identify the customer outcome

      2. What measurable benefit do they get? Examples: increased revenue, time saved, risk avoided, cost reduction, conversion lift.

  1. Quantify that value

      2. Translate the outcome into dollars (or other high-salience units) from the customer’s perspective.

      • “Our tool reduces churn by 5%, equating to $X in retained recurring revenue.”
      • “Using this process saves a founder 10 hours/week—worth $Y in opportunity cost.”
  1. Determine your capture fraction

      2. Decide what reasonable share of that value you can price for—often 10–30% depending on competitive context, risk, and customer sensitivity. That becomes your price anchor.

  1. Segment by value realization

      2. Not all customers get the same value. Create tiers or versions where higher-paying segments receive higher-delivered outcomes or guarantees (e.g., “Pro” clients get personalized strategy that’s worth more to them).

  1. Frame messaging around impact

      2. Lead with the outcome (“Double your repeat rate in 90 days”) rather than features or convenience. Use proof (case studies, quantified before/after) to justify the price relative to value delivered.

  1. Test and defend
      • Price experiments: offer at value-aligned price to a segment, measure conversion vs. perceived value.
      • Objection handling: surface the gap between cost and what they’d lose without the outcome.
      • Value refresh: as customers realize more benefit, revisit capture fraction (raise price or upsell).
  1. Build guarantees or risk reversal

      2. Reduce friction by linking price to performance when possible (e.g., “If you don’t see X uplift in 60 days, we’ll refund Y”), making the value promise credible.

Decision thresholds / guardrails

  • Price is disconnected from outcome → Recalculate using real customer data; avoid convenience-based anchors like “industry standard” if your value exceeds it.
  • High churn after price increase → Check if the promised value wasn’t delivered or communicated clearly—tighten onboarding or proof.
  • Customers negotiating back to cost-plus → Reinforce with outcome framing, ROI math, and segment-specific packaging.
  • Value varies widely across users → Segment pricing/offers rather than one-size-fits-all to prevent both overdiscounting and undercharging.

Examples

  • SaaS: Instead of charging per seat (convenience), price based on revenue uplift—tiers tied to % of revenue improved, capturing a slice of the upside.
  • Consulting: Sell strategic reviews not as hours, but as “X points of margin improvement,” and price as a fraction of the expected profit gain.
  • E-commerce B2B: Offer faster fulfillment as a value add only for customers who incur real cost from delays, pricing the premium based on their operational savings.

Thinking checks

  • Can you state the dollar (or comparable) value of your core outcome to the customer?
  • Is your price a defensible fraction of that outcome, and is that communicated up front?
  • Are you segmenting customers by the value they receive and not just charging a flat fee?
  • Do you have evidence (case studies, metrics) that supports the value claim in purchase conversations?

What to track (minimum)

  • Outcome-to-price ratio (value delivered vs. price charged)
  • Conversion by price point/segment
  • Churn or pushback after price alignment changes
  • Upgrade/expansion rates when value increases
  • Customer ROI perception (surveys or feedback)
 
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