Article · ~8 min read
A Quick Guide to Value-Based Pricing
Utpal M. Dholakia · Harvard Business Review Freemium Intermediate
This lays out the mechanics of anchoring price to the value a customer gets rather than to what competitors charge, which is your only real option when there is no competitor to check against. It gives you the actual questions to ask a prospect to quantify what their current, worse solution costs them. That number becomes your anchor.
- Ask what the customer currently spends, in money and time, to solve the problem badly.
- Price as a fraction of the value delivered, not as a multiple of your own cost.
- Most founders undersell because they never run this calculation with a real prospect.
