Smarter Pricing: How to capture more value in your market

Stage 1. Customer factors

Calculate the value to the customer, calibrating the benefits provided by the goods or the service. For example, a company clearly understands the value an agent brings in representing them in the market and normally offers a fixed percentage of the turnover he introduces to the principal. Different customer groups may gain value from the product or service differently and so present opportunities for discriminatory pricing structures or segmentation in order to capture the available value.

You consider ability to pay. Can the customer afford the product or service? There may be a need and it may represent good value, but it is important to ensure that the customer has the cash flow or funds available to make the transaction. ...