Ibbaka speaks with a lot of people about value and pricing. Sometimes, when people hear that we are pricing experts, they assume that we are out to gouge buyers. This could not be more wrong. Good pricing aligns the interests of the buyer and seller.

Value-based pricing emerged from the need to price differentiated products and services in the B2B context. Price optimization models based on simplistic economic theories proved inadequate for complex solutions with multiple stakeholders in the decision making unit. But over the past two decades, applications have expanded, first to sales and marketing, then to product management and marketing and most recently to customer success.

Value-based pricing and the customer journey are coming together as a the new discipline of customer value management. How would you like to go about activating and embedding this capability in your organization?

People come to Ibbaka with many different pricing challenges. Sometimes these are symptoms for deeper problems. How can we organize the many different types of pricing challenge and diagnose the root causes?

Service-led growth offers a compelling alternative to product-led growth. It requires less investment capital and builds stronger and more durable relationships with customers. These relationships drive the insights needed for meaningful innovation. But is service-led growth relevant to manufacturing?

Sometimes we think of price as a number, the number, often ending in a 9 or 7 or 5, that we see on the pricing page. But to price effectively one needs to think of a price in the context of what is priced and how the price is presented. Price is a lot more than just the number on the price tag. It is how we frame value communicate differentiation.

Service-led growth (SLG) is a new approach to growing resilient, adaptive and sustainable companies. It is based on a growth flywheel that is kicked off with services, that lead to subscriptions, data is gathered to generate insights, that lead to new services. It is an alternative to product-led growth that is less dependent on external financing.

Customer value management (CVM) is the most important business discipline. It helps companies across the value cycle of create, communicate, deliver, document and capture value. The result is that companies can track V2C (Value to Customer) and make sure that V2C and LTV (Lifetime Value of a Customer) are aligned. This requires methods from value-based pricing.

Many organizations struggle to adjust prices for local markets. Price setting in these markets is often arbitrary but it does not have to be. One can adjust pricing for international markets in a way that is fair, consistent and transparent. The Service Design Network provides a recent example.

Value-based pricing is much more than way to set prices, or even as a tool to justify prices in the sales conversation.

Inflation is raising its head. This will lead to pressure on pricing leaders to increase prices. Before making a knee jerk response, find out how inflation impacts your customers and the differentiated value you provide them. Ask what impact inflation will have on demand for your solutions.

Usage-based pricing is one part of value-based pricing but it is not the whole story. Recent research from the Subscribed Institute finds that usage-based pricing has the biggest impact on revenue growth when combined with other pricing metrics. Why is this? We look at why usage-based pricing drives higher growth up to a point, and why an excessive reliance on usage-based pricing can slow growth.

Value based pricing is widely misunderstood. Some people think it can be reduced to willingness to pay (WTP). It cannot. In a recent LinkedIn post Robert Ribciuc asked nine rhetorical questions about value based pricing. We answer them here.

The value ratio is a critical but frequently overlooked pricing metric. Tracing this metric is critical to your long-term health. Deciding what level to target is one of the most important Where to Play choices you make in pricing.

A lot of data is generated across the customer journey. Innovations platforms, product development applications, marketing automation, sales management (CRM), configure price quote (CPQ), project management, customer service platforms, customer success … Where is the data from all of these applications gathered and put in the context of value? This is the direction we are taking the Value Pricing Dashboard. It will be the integration point for all of the data about value to the customer (V2C).

At Ibbaka, we often come across organizations who struggle to support their sales team in their value-based selling endeavours. Sales teams often find it difficult to defend pricing and communicate the differentiated value of the offer.
With that in mind, we developed The Ibbaka Value Pricing Dashboard which is a software as a service (SaaS) application that connects value to price, and helps organizations quantify and demonstrate the value that they deliver to their customers.

Product Led Growth (PLG) has proven to be a very successful business and investment strategy and has delivered some spectacular results. But is doesn’t work for every company and even the best product led growth companies will find that they need to adapt as their markets mature. But every company can learn from product led growth and needs to adopt the most powerful tactics into their own approach.

Value based pricing requires a formal value model. If you do not have value models that quantify value drivers and connect them together you are just pretending to do value based pricing. Good value models are three dimensional they include economic, emotional and community value drivers. They become real when they are validated in conversations with customers.

Pricing and value communication is central to good price management. When and how price is introduced into the customer conversation has a big impact on price acceptance. The customer journey map provides a guide to how to plan these conversations. Layering pricing and value into the customer journey is a best practice.

In most companies value and pricing are disconnected. Even worse, value promises and value delivery are not well documented. The result is lower sales, more discounting and churn. The Ibbaka Value Pricing Dashboard connects pricing to value across the customer journey. It gathers the data you need to effectively evolve pricing.