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?
What are customers willing to pay for your product?
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?
Survey
Customers compare various value propositions at different price points and choose the ones they will buy
Predict
Replicates a real-world buying environment to predict customers’ buying behavior
Simulate
Use advanced AI to simulate various Value Proposition design outcomes at different price points
Optimize
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)
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