Pricing is All About Value "Product people - Product managers, product designers, UX designers, UX researchers, Business analysts, developers, makers & entrepreneurs November 11 2013 True Pricing, Value, Mind the Product Mind the Product Ltd 247 Product Management 0.988

Pricing is All About Value


Pricing vs ValuePricing strategy is all about value. ‘Must-have’ capabilities are more expensive than ‘nice to have’.  So what’s the value to the client?

A simple way to look at pricing is to use a three-by-three matrix (like a game of tic-tac-toe or noughts and crosses). The vertical axis is the cost of doing it myself, while the horizontal is the number of vendors that offer it. Mark each with low-medium-high. The closer you get to the upper left, the more you can (and should) charge. That is, if it would take a lot for me to learn and there are few vendors who offer it, you can charge me a lot. If it’s fairly easy to learn and I have lots of choices, you won’t be able to charge very much.


For example, I’d put scrum method training somewhere in the middle, but more towards the lower-right. I can read books, I can attend training from many vendors and I have access to thousands of certified or self-proclaimed scrum coaches who can come to work with my team.

One way to manipulate this a little is to offer a unique capability that is unavailable elsewhere. A metaphor, a framework or an approach, for example, which is unique to your offering.

Finally, the challenge isn’t whether you can charge $5 or $50. The challenge is whether you can charge anything more than $0. With so much free content available, you have to offer something that people are willing to pay for.