Optimal Pricing

The key to your success lies in an organization’s ability to create unique value.

  • What value will your organisation create?

  • How will your business capture some of that value for itself?

Like the laws of physics, there are laws in business on how to extract value. There are only two ways to extract value:

Value Extraction 1: Low-Cost Leader

Option 1: The low-cost leader = High Profit through low cost structure

Value Destruction: Stuck in the Middle

‘STUCK IN THE MIDDLE’ = LOW PROFIT due to high cost structure and NO premium pricing

Value Extraction 2: Differentiation

Option 2: Differentiation = High Profit through premium pricing

Source: Micheal Porter’s Three Generic Strategies

An Optimal Price will answer the following questions:

What is the most basic, core product or service that my customers will buy, albeit at a low price?

What features and benefits will customer pay a premium for?

What features and benefits will customer not pay a premium for?

Which customers want
  • The lowest cost basic product or service
  • Differentiated premium product or service (See Customer Segmentation)
  • What are customers willing to pay for your product?

    At what price do you
  • gain market share
  • optimize income
  • optimize profit
  • Our process: Conjoint analysis

    Conjoint analysis, an advanced AI-driven trade-off methodology, will allow you to design the optimal price point for your value proposition

    How does it work?


    Customers compare various value propositions at different price points and choose the ones they will buy


    Replicates a real-world buying environment to predict customers’ buying behavior


    Use advanced AI to simulate various Value Proposition design outcomes at different price points


    Identify the optimal Price Point that customers are willing to pay to give your business more market share, income or profit

    How you can use the insights

    Value Equivalence Line

    Price Sensitivity

    Willingness to Pay (WTP)

    Click to enlarge images