Work out value based price instantly with clear inputs, formula shown and shareable results.
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.
Value-based price
Price = Reference price + (Differentiation value x Capture share %)
Total economic value
TEV = Reference price + Differentiation value
Add up measurable savings — labour hours avoided, downtime removed, scrap reduced, energy saved — over the period the customer evaluates.
Typically 30-60%. A visible surplus is what makes the buyer's business case work, and it also protects you when a competitor responds.