Competitive Pricing or? Value-Based Pricing

Question

This compares setting prices based on competitors’ pricing strategies (competitive pricing) versus pricing based on the perceived value of the product or service to the customer (value-based pricing).

which is better in the long run?

Benson Xu · Accepted Answer

Value-based pricing can be a game-changer if your product truly solves a unique problem. However, it's crucial to thoroughly understand your target market and ensure your pricing aligns with the perceived value you're delivering.

Benson Xu · Answer

Value-based pricing can be a game-changer, especially for unique products or services. It allows you to capture more of the value you create for customers, potentially leading to higher profits and stronger customer relationships.

Mark Lemuel M · Answer

@ag94 ftw!

Yulita Nurul · Answer

It depends on your business goals and market conditions. Competitive pricing focuses on setting prices based on competitors' prices, while value-based pricing sets prices based on the perceived value to the customer.

Liam Patrick O'Connor · Answer

Value-based pricing for sure. Gotta maximize that customer LTV! But it's tricky to nail down the optimal price points. Any pricing tools or tactics you've found effective for maximizing revenue per customer without pushing them away? I'm thinking of experimenting with some dynamic pricing algorithms but not sure where to start.

A Momin · Answer

There are multiple factors to look at when deciding which pricing model to choose. 
For Example: if you choose the value-based pricing then how much of a difference there is as compared to the competitors. Much difference can lead to loosing customer even though you provide more value.

Mark Lemuel M · Answer

@vaibhavdwivedi yup!

Valianto · Answer

use only competitive pricing when the market already fill with many players

Benson Xu · Answer

Value-based pricing can be a game-changer, focusing on the unique benefits your product offers rather than just matching competitors. It allows you to capture more of the value you create, potentially leading to higher profits and a stronger market position.

Abdurrahman Yiğit · Answer

I think competitive pricing is a race to the bottom. Since I changed my vision to value-based pricing both me and customers are more satisfied!

Alexander Galitsky · Answer

Dynamic, to get most out of your dear customers!

Vaibhav · Answer

It really depends on the market, product and other factors.

AnnaHo · Answer

Both have their merits, but value-based pricing tends to be more sustainable long-term as it reflects the true worth perceived by customers.

Loic Thirion-Lopez · Answer

I think value-based pricing is better for SaaS products in the long run. It aligns pricing with customer value, allowing for higher profit potential and better differentiation. This approach incentivizes product improvement, supports premium brand positioning, and can lead to more muscular customer retention. Unlike competitive pricing, it avoids unsustainable price wars, allowing for more strategic, value-driven growth.

Answer

Dynamic pricing FTW! Milk those whales for all they're worth. 🐋💸 But for real, value-based pricing ensures you're not leaving money on the table. Charge what each customer is actually willing to pay, not some artificially low 'competitive' price. Pricing optimization tools like ProfitWell or Price Intelligently can help ya dial it in just right. 📈

Competitive Pricing or? Value-Based Pricing

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