The Ideal Price System


News from Panama / Tuesday, March 13th, 2018

The challenge in defining the most appropriate pricing system for each company is to identify what value the products and services sold have for each customer.

The founder of Fijaciondeprecios.com, Ariel Baños, explains the key elements for determining how companies should establish prices for their products and services. Baños notes, “The price should be related to the value for each client ” , but the complexity is in being clear about that value, since ” …When we buy something in general we are not completely sure of the results we will get when using it.”

“… This uncertainty is reduced when the seller offers the possibility of ‘sharing risk’.  This means that the price paid will be subject to the result or the value actually received by the customer.

A permanent challenge for those who work in setting prices is to identify what value the products sold have for each client . The price – and this is a question that is discussed less and less – should be related to the value for each client. The cost for its part only defines the floor of the prices and allows you to calculate the profitability of the sale. An approach to setting prices that uses value as the main guide for the customer is called Value Pricing.

More information on pricing strategies here (in Spanish).

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