Pricing is not about "prices."

Businesses generate their revenue by executing the following three activities:


  1. Value creation: Designing and developing the offerings for which the customers will pay to acquire

  2. Value communication: Informing the market and the prospective buyers/users about your offerings

  3. Value realization: Completing purchase transactions, delivery, deployment

Value pricing

Pricing defines the ways in which value exchanges hands between the business and its buyers. It also aligns the levels of perceived and realized value with segments. Therefore, it's much more than just a point.

A good pricing plan has three components:

  1. The pricing structure

  2. The pricing model

  3. The pricing window

These three components must be designed so that your offerings deliver commensurate levels of value to each of your segments and according to their willingness to pay. We'll dive into each of these components next week. In the meantime, we're leaving you with your first question.


How would you define your current pricing structure, model, and windows in relation to your target segments?