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Price Research: Supporting the 5 C's of Value-Based Pricing


Value-Based Pricing strategy and implementation is frequently described along 5 C's:

  • Comprehend the things the customers value: Begin differentiating from competitors by understanding customers’ needs better than the competitors do. When mastered it is much easier to differentiate and communicate value
  • Create value for the customer: Define and design a differentiated offering that addresses the customers’ requirements more effectively than competitors’ solutions can.
  • Capture value through effective pricing: Create prices and price structures that accurately depict the value of a product by using knowledge of the product, and its value to the customer.
  • Communicate the value: Put together powerful, persuasive value propositions that distinctly communicate value to the customer. Make them recognize that you have taken the time to understand their needs, and create the value that they require
  • Convince customers that your value is worth paying for: Confidence is vital in order to convince the customer that the price is right. When the customer inevitably says that the offering is too expensive, instead of immediately giving them a discount, salespeople should be confident and reply, “Well look, when you think about the value that we deliver I would actually go as far as to say not only aren’t we expensive, we’re probably not charging quite enough.”

Research on willingness-to-pay can help with several of those areas.

Comprehend value

The comprehension of what customers value can come from many sources. One of them is certainly different willingness-to-pay research techniques:


 In the above example (price on the horizontal axis, optimum vertically), different customer segments value the product differently. 

Choice-based conjoint analysis is another method to help the comprehension of what people are willing to pay. In headline terms, it will tell you what features are valued, and what features are not, by customer segment.

Communicate value

 You cannot communicate value if you don't know what matters to the customer. Well, you can, but the results are either meaningless or even directly damaging if the conversation goes along: Sales person: "We are really excited about this feature A" - Customer: "I really only care about Feature B or Outcome/Result X".

With price research based on conjoint analysis, e.g. PriceBeam Value Atrributes, a marketing manager can pinpoint what features/results are in demand, even by specific customer segments, channels, or groups.


If sales people don't believe in your value, or your prices, then half of the battle is lost already. Solid price research will help with conviction in several ways: 

  • if knowing what segments are willing to pay a higher price, sales people are more confident
  • if understanding what features are considered valuable, sales teams feel stronger when putting proposals together
  • indirectly: if selling e.g. through wholesalers or retailers, knowing what the final customer is willing to pay, will support price negotiations with the wholesaler/retailer, as you can argue value to their customers, i.e. the final customer.

Training in value argumentation and negotiation skills around prices is key in any value-based pricing strategy. Unfortunately, it is often overlook and either not done at all, or done generically. Support the training and negotiation plans with price research to solidify arguments and the conviction.

Follow PriceBeam's blog for always up-to-date insight and news about pricing.