Can You Set Your Pricing Based on the Value You Bring to Customers?

By Kathy Steele

Wednesday, June 30, 2021

What are your products and services worth to customers? How do you compare to their next best option? Can you prove it? If you're unable to answer these questions, you are not alone. Surprisingly, very few businesses can articulate and substantiate their value. That may be good news for you. Think about this buying scenario. You are leading the search for a CRM (Customer Relationship Management) Software Solution for your company. Two companies are trying to sell you on their platform- a central place where your businesses can store customer and prospect data, track the sales pipeline and share this information with leadership to drive sales outcomes. The first software platform vendor claims: "Our CRM is Best in Class." We can digitally transform your business." The second vendor says, "We can increase your top-line revenue by over 10% in the first year," and walks you through exactly how they do it. Which proposal would you find more persuasive? The second vendor establishes a tangible outcome in their offer and has likely provided case studies and testimonials to back up their claim during the sales process. They are using Customer Value Management (CVM) in their sales process. By definition, CVM methodology measures a company's customers' view of the perceived value for money delivered relative to their customers' customers. 

In our webinar, Quantify Your Value with Customer Value Management (CVM), we interview Eric Bergrenn, Managing Director of Axios Partners and expert on helping businesses develop their customer value to increase revenues and profitable growth. Eric shares to establish your product or services value definitively, it must have a unique value proposition, and you need to be able to describe it on three levels:

  • What is the CUSTOMER'S PERFORMANCE when they use our product? 
  • The BUSINESS AND PERSONAL OUTCOMES from that performance difference
  • The WORTH of those outcomes in monetary terms

Statements like superior quality, complete solutions, best solutions are just fluff and do not distinguish your product or service. Eric says, "in the end, customers make their purchase decisions based on the third level of value or what our product is worth." Prospective buyers look at the value we will deliver compared to their next-best alternative to validate if our value is more significant than our asking price. If that value is greater, we have given them an incentive to purchase from us.

While it seems straightforward, considerable data is needed to create a value calculator for your product or service. You need to understand how your product or service financially impacts the customer's performance, your competition's pricing standards, and have a defined positioning that is unique and differentiated. The upside is the investment can have a significant impact on your business. Improving sales wins, shortening the conversion cycles, more profitable margins are just some ways this methodology can affect your business growth. I, for one, am sold!

To learn more watch the replay.

Are you ready for growth?


Kathy Steele

Kathy Steele


Kathy Steele is passionate about people, serious about business growth, and loves to help the underdog cause in her community. She is fortunate to "do it all" in her role as CEO of Red Caffeine. She’s the company visionary overseeing growth, strategic partnerships, and employee engagement. On the rare occasion that she’s not working, she’s traveling, eating and drinking with the locals, or challenging her husband to a tennis match or round of golf.