Archives tagged: Economic Value to Customer (EVC)
A good pricing decision is two-fold: One defines an aspirational list price and a commercial policy that deducts from this list price known discounts, which lead to the expected target prices by customer segment and perhaps channel.
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In this article I will review some of the issues engaged and practices suggested by different authors, and then offer the Half-Gains Double-Losses rule to define the capturable value from the economic value to customer and therefore drive a price recommendation for guiding the pricing decision.
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Dedication to understanding its customers makes a company more knowledgeable about the competitive landscape and better equipped to anticipate changing conditions. The entire company feels less insular and more connected to its existential purpose: serving customer needs profitably.
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