Value-based pricing
Value-based pricing sets the price of a product based on the perceived or quantifiable value it delivers to the customer, rather than on cost or competition.
Value-based pricing anchors pricing to the economic value the product creates for the customer. It requires a deep understanding of customer outcomes and willingness to pay, and typically results in higher prices and margins than cost-plus or competitive pricing.
Example: A billing automation platform saves its customers an average of $50,000 per year in manual finance work. Instead of pricing based on its development cost, it charges $15,000/year, capturing a fraction of the value delivered while remaining highly attractive to customers.
