Skip to content
ENExplore Calculators

Value Based Price Calculator

Work out value based price instantly with clear inputs, formula shown and shareable results.

About Value Based Price Calculator

Value-based pricing starts from the customer's next-best alternative (the reference price) and adds the differentiation value your offer creates. Charging the whole differentiation value leaves the customer indifferent, so you capture a share and leave the rest as customer surplus to win the deal.

Formulas

Value-based price

Price = Reference price + (Differentiation value x Capture share %)

Total economic value

TEV = Reference price + Differentiation value

Worked example

With the default values below, Value Based Price Calculator returns Value-based price of $1,605.00. Change any input above and every figure here is recalculated in your browser.

Inputs used

Next-best alternative price
1,200
Extra economic value your product delivers
900
Share of extra value you capture
45

Results

Value-based price
$1,605.00
Value left with the customer
$495.00
Premium over the alternative
33.75%
Total economic value to customer
$2,100.00

Step by step

  1. 1Values used
  2. 2Value-based price
  3. 3Total economic value
  4. 4Value-based price= 1,605.00
  5. 5Value left with the customer= 495.00
  6. 6Premium over the alternative= 33.75
  7. 7Total economic value to customer= 2,100.00

Assumptions and limits

  • The result is derived only from the 3 inputs listed above. Anything not among them is not part of the calculation.
  • In particular, this calculator does not take inflation, tax, fees or charges or compounding frequency into account.
  • Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
  • This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

How do I quantify differentiation value?

Add up measurable savings — labour hours avoided, downtime removed, scrap reduced, energy saved — over the period the customer evaluates.

What capture share is realistic?

Typically 30-60%. A visible surplus is what makes the buyer's business case work, and it also protects you when a competitor responds.

Related Calculators

Value Based Price Calculator – Calculate Value-based price