Scary Moment of Truth: What’re Customers Really Willing to Pay?

Solid execution of value pricing requires an understanding of customer willingness-to-pay (WTP). To effectively implement the best prices, let’s spend a little time digging into the willingness-to-pay.

Our target with pricing – find the best prices for you and your customers, then implement them effectively.

​Define customer willingness-to-pay 

​Customer WTP is the maximum amount of money a customer is willing t​o ​hand over for ​what you sell. ​​By understanding WTP ​you​ ​possess knowledge. This knowledge ​helps you achieve ​a price as close as possible to what they’re willing to pay. You’ll know which strategies and tactics ​to use to ​get them to pay that much.

There are two main reasons WTP can be a challenge to understand.  

​​WTP Isn’t A Single point

A customer’s willingness-to-pay is affected ​by many things: ​ ​value perception, personal priorities, current pain points, alternative offers, etc. ​​These things change in a instant. Which means you can ask a customer the ​WTP question on two different days and get different answers. 

It also means ​WTP is hard to pinpoint, because it’s not a point! ​How can it be when it’s influenced by things that ​shift and change? Stop looking for the WTP point. ​Start looking at it as a range or zone.

​​​Bias Gets in the Way

The ​second challenge in understanding WTP ​is bias. When we ask customers WTP-related questions, ​their answers are infused with bias (even with the best of intentions). ​​When we try to limit customer bias by making our own “assumptions”, ​our own bias comes into play. ​We’re horrible at leaving our own biases behind. ​Instead we can strive to make more educated analysis to support ​our assumptions.

​3 Ways to Understand Willingness-to-Pay

​In this video we’ll ​look at why ​​direct WTP questions can backfire and what to do about it. Then ​I give you three ways ​to start understanding. ​These things can help you mitigate the challenges of understanding WTP.

​​Got questions? ​I just started a FB group, Charge Your Worth with Janene the Pricing Lady, where you can start asking some of those burning questions. Engage in discussions with myself and others about pricing.  See you there!

Join me. Let's talk Pricing!

The 3rd Wednesday of the month we look at topics like…

JAN Where should I start with my pricing?
FEB Why profit isn't the bad word you think it is.
MAR Aligning your pricing strategy with biz goals
APR Should I offer tiers/packages for different segments?
MAY Why do I struggle to tell people what I charge?
JUN 3 simple actions when pricing objections arise

Add the dates to your calendar. using the link in the Zoom, email confirmation. Join one, a few or all. Events are usually 3rd Wednesday of the month at 16.00 Central European Time.

By registering to this event you will be added to my email list and receive updates about these events. As well as other great pricing content and resources. You can unsubscribe at any time.

Is it Time to Raise Prices?
And How to Do So Effectively.

Live Web Class

Raising prices isn’t as risky as you think it is.

Far too many businesses know they need to raise  prices but are afraid to do so. So they wait. And wait. And wait. Until it’s so painful they have no choice. That’s when raising prices gets riskier.

You need to know what to do and how. Find out more in this LIVE web class where we’ll look at:

  • Why people wait
  • Myths of raising prices
  • How to know when to do it
  • Tactics and strategies to do it effectively
Join me Oct 24th 17:00 CET /  11:00am EST.

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