Why Does Value-Based Pricing Work Best?

by | Jan 8, 2016 | Financial

If you are an accountant, there are ways you can use financial reporting software to make the switch to value pricing. Value pricing is the best possible way to do business for a number of reasons but it means that as an accountant, you will have to come up with a price that your customers are willing to pay.

Many experts recommend this pricing technique but you will need to be able to capture the right price point for a product or service that is what the majority of your current and future customers are going to be willing to pay.

Armed with a calculator and lots of time, there are ways that you can come up with value-based pricing strategies on paper. Or, you can use financial reporting software to keep track of your financial data, collect data provided to you by your customers through what they have already purchased and set value-based prices.

Setting Value-Based Prices

It all boils down to being able to set a price that captures the perceived value of services offered to current and potential. This requires the following steps to be taken:

1. Figure out what your customer’s second place option is. That is, if they do not purchase from you, what would their second choice be?

2. Know the price of the second choice option.

3. Come up with a defining list of ways in which your option is better than the second place option.

4. Be honest and make a list of why the second place option may be better than the one you offer.  This can be extremely difficult but will help you financially in the long-run.

5. Use financial reporting software, enter this data and come up with your value-based price.

Some accountants choose to do this by hand which can take a lot of time. Using a software tool to obtain this data will help save you time and money while also keeping your customers and potential customers happy.

Right Answer

While there is no right or wrong answer because every customer is different, this is the best possible way to determine value-based pricing for your potential clients. The data that is saved in a financial software system will keep you constantly on your toes with the most up to date information. You will then be able to find the value-based pricing that is the best for the services and products that you offer. It will make your life much easier.

Qvinci can show you how accountants can use financial reporting software to switch over to value pricing. Visit their website – Qvinci.com to find out more about their services.

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