What's a "value stack?"

A value stack is a segmentation methodology which is used in value-based pricing. You can construct the value stack of each buyer/user type by first identifying the attributes that drive their willingness-to-pay and then quantifying the value of the benefits that they receive from those attributes. Finally, you can stack up each of these benefits and construct a value-based segmentation of different buyer/user types: the value stacks.

We call the  quantified perceived value of a particular customer type a value stack.

Value stack

1.Identify different customers’ needs for which they are actually willing to pay.

2.Depict the relative perceived value of each of the attributes and determine what’s more valuable and most valuable.

3.Quantify customers’ overall willingness to pay for an offering that has their particular attributes of value.

Segmenting by value stacks is the most scientific method for customer segmentation.

Customers differ in their value stacks more than how they differ in anything else, such as demographics, industries and sectors.  You have alternative value stacks for which you can develop your product.  You can better decide what features and attributes to develop by knowing how the value stacks of different customers look like, what you can price, and how you can take your solution to market profitably. You must align your offer structure with the value stacks of your different customers.