{"id":22795,"date":"2019-09-12T07:18:36","date_gmt":"2019-09-12T07:18:36","guid":{"rendered":"https:\/\/vendavo.wpengine.com\/?p=22795"},"modified":"2023-06-12T01:29:51","modified_gmt":"2023-06-12T07:29:51","slug":"the-opportunity-in-value-based-pricing","status":"publish","type":"post","link":"https:\/\/www.vendavo.com\/pricing\/the-opportunity-in-value-based-pricing\/","title":{"rendered":"The Opportunity in Value-Based Pricing"},"content":{"rendered":"\n

Does this sound familiar?<\/p>\n\n\n\n

<\/span>A Pricing Fairy Tale<\/span><\/h2>\n\n\n\n

An ambitious, recent college grad starts their first pricing job. In week one, they are told to dive into the pricing project for which they were hired: to implement a dramatic change in the company\u2019s pricing strategy.  After studying the status quo and learning the layout of the company\u2019s data files, they pull up the Excel file (\u201cValue Based Price List (v. 285).xlsx) and review the sophisticated algorithmic formula:<\/p>\n\n\n\n

 =((\u2018[Cost_File1.xlsx]Costs_Sheet1\u2019!$F13)+ (\u2018[Cost_File2.xlsx]Costs_Sheet1b\u2019!$F13))*1.085<\/em><\/p>\n\n\n\n

Excited and ready to impact the business, the pricing analyst implements a new strategy.\u00a0 How?\u00a0 By changing the number (the PLUS in cost plus) from 1.085 to 1.082<\/u><\/strong>. After saving the file, they \u00a0feel pretty good about a solid day\u2019s work of \u2018strategic\u2019 pricing.<\/p>\n\n\n\n

This only slightly fictionalized story happened almost twenty years ago. No willingness-to-pay studies were conducted, no price optimization algorithms were developed, not even any forward-looking cost projections went into this so-called strategy. Cost-plus was the order of the day.<\/p>\n\n\n\n

<\/span>Talking the Talk But Not Walking the Walk<\/span><\/h2>\n\n\n\n

In the intervening years however, much has changed. Pricing professionals now rely on both high-impact, dynamic data and sophisticated solutions that have powered a dramatic shift in the pricing view of the world\u2026or do they?<\/p>\n\n\n\n

While new data and solutions to manage it all have emerged, most pricing professionals aren\u2019t making good use of it. In reality, value-based pricing remains a pipe dream for most companies.<\/p>\n\n\n\n

Over the years, Joe Dallimore<\/a> of Qualtrics and I have managed pricing teams at numerous companies and consulted with hundreds more. Sadly, this silly story is not far from what is happening with most companies throughout the world. Too many people talk \u201cvalue-based\u201d pricing but actually walk with \u201ccost plus.\u201d The good news is this situation marks a great opportunity for those who can establish value-based pricing ahead of their competitors.<\/p>\n\n\n\n

In our increasingly digital world, the time to learn how to leverage data sources and available solutions to develop true value-based pricing processes and practices is now. And it has never been easier to get to value-based pricing.<\/p>\n\n\n\n

<\/span>CX and ML<\/span><\/h2>\n\n\n\n

To start making improvements to your pricing strategy, there are two primary disciplines to understand: Customer Experience (CX)<\/strong> and Machine Learning (ML) Based Price Optimization<\/strong>.  Knowing the important roles these two different, but related practices play in B2B pricing will help you regardless of where you and your team are on the pricing maturity spectrum.<\/p>\n","protected":false},"excerpt":{"rendered":"

Does this sound familiar? A Pricing Fairy Tale An ambitious, recent college grad starts…<\/p>\n","protected":false},"author":24,"featured_media":38362,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_kad_blocks_custom_css":"","_kad_blocks_head_custom_js":"","_kad_blocks_body_custom_js":"","_kad_blocks_footer_custom_js":"","_kadence_starter_templates_imported_post":false,"_kad_post_transparent":"","_kad_post_title":"","_kad_post_layout":"","_kad_post_sidebar_id":"","_kad_post_content_style":"","_kad_post_vertical_padding":"","_kad_post_feature":"","_kad_post_feature_position":"","_kad_post_header":false,"_kad_post_footer":false,"footnotes":""},"categories":[1240],"tags":[1249],"class_list":["post-22795","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-pricing","tag-price-optimization"],"acf":[],"yoast_head":"\nOpportunity of Value Based Pricing | Vendavo<\/title>\n<meta name=\"description\" content=\"Pricing professionals now rely on both high-impact, dynamic data and sophisticated solutions that have powered a dramatic shift\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.vendavo.com\/pricing\/the-opportunity-in-value-based-pricing\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Opportunity of Value Based Pricing | Vendavo\" \/>\n<meta property=\"og:description\" content=\"Pricing professionals now rely on both high-impact, dynamic data and sophisticated solutions that have powered a dramatic shift\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.vendavo.com\/pricing\/the-opportunity-in-value-based-pricing\/\" \/>\n<meta property=\"og:site_name\" content=\"Vendavo\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Vendavo\" \/>\n<meta property=\"article:published_time\" content=\"2019-09-12T07:18:36+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-06-12T07:29:51+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.vendavo.com\/wp-content\/uploads\/2019\/09\/Busy-office-1.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"910\" \/>\n\t<meta property=\"og:image:height\" content=\"480\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Vendavo\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@vendavo\" \/>\n<meta name=\"twitter:site\" content=\"@vendavo\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":[\"Article\",\"BlogPosting\"],\"@id\":\"https:\/\/www.vendavo.com\/pricing\/the-opportunity-in-value-based-pricing\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.vendavo.com\/pricing\/the-opportunity-in-value-based-pricing\/\"},\"author\":{\"name\":\"Vendavo\",\"@id\":\"https:\/\/www.vendavo.com\/#\/schema\/person\/29d5eac51cc33b77096880b2464da495\"},\"headline\":\"The Opportunity in Value-Based Pricing\",\"datePublished\":\"2019-09-12T07:18:36+00:00\",\"dateModified\":\"2023-06-12T07:29:51+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.vendavo.com\/pricing\/the-opportunity-in-value-based-pricing\/\"},\"wordCount\":426,\"publisher\":{\"@id\":\"https:\/\/www.vendavo.com\/#organization\"},\"image\":{\"@id\":\"https:\/\/www.vendavo.com\/pricing\/the-opportunity-in-value-based-pricing\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.vendavo.com\/wp-content\/uploads\/2019\/09\/Busy-office-1.jpg\",\"keywords\":[\"Price Optimization\"],\"articleSection\":[\"Pricing\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.vendavo.com\/pricing\/the-opportunity-in-value-based-pricing\/\",\"url\":\"https:\/\/www.vendavo.com\/pricing\/the-opportunity-in-value-based-pricing\/\",\"name\":\"Opportunity of Value Based Pricing | Vendavo\",\"isPartOf\":{\"@id\":\"https:\/\/www.vendavo.com\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.vendavo.com\/pricing\/the-opportunity-in-value-based-pricing\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.vendavo.com\/pricing\/the-opportunity-in-value-based-pricing\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.vendavo.com\/wp-content\/uploads\/2019\/09\/Busy-office-1.jpg\",\"datePublished\":\"2019-09-12T07:18:36+00:00\",\"dateModified\":\"2023-06-12T07:29:51+00:00\",\"description\":\"Pricing professionals now rely on both high-impact, dynamic data and sophisticated solutions that have powered a dramatic shift\",\"breadcrumb\":{\"@id\":\"https:\/\/www.vendavo.com\/pricing\/the-opportunity-in-value-based-pricing\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.vendavo.com\/pricing\/the-opportunity-in-value-based-pricing\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.vendavo.com\/pricing\/the-opportunity-in-value-based-pricing\/#primaryimage\",\"url\":\"https:\/\/www.vendavo.com\/wp-content\/uploads\/2019\/09\/Busy-office-1.jpg\",\"contentUrl\":\"https:\/\/www.vendavo.com\/wp-content\/uploads\/2019\/09\/Busy-office-1.jpg\",\"width\":910,\"height\":480},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.vendavo.com\/pricing\/the-opportunity-in-value-based-pricing\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.vendavo.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"The Opportunity in Value-Based Pricing\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.vendavo.com\/#website\",\"url\":\"https:\/\/www.vendavo.com\/\",\"name\":\"Vendavo\",\"description\":\"Unlock Growth + Profitability\",\"publisher\":{\"@id\":\"https:\/\/www.vendavo.com\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.vendavo.com\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/www.vendavo.com\/#organization\",\"name\":\"Vendavo\",\"url\":\"https:\/\/www.vendavo.com\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.vendavo.com\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/www.vendavo.com\/wp-content\/uploads\/2021\/02\/vendavo-logo-events.jpg\",\"contentUrl\":\"https:\/\/www.vendavo.com\/wp-content\/uploads\/2021\/02\/vendavo-logo-events.jpg\",\"width\":416,\"height\":250,\"caption\":\"Vendavo\"},\"image\":{\"@id\":\"https:\/\/www.vendavo.com\/#\/schema\/logo\/image\/\"},\"sameAs\":[\"https:\/\/www.facebook.com\/Vendavo\",\"https:\/\/x.com\/vendavo\",\"https:\/\/www.linkedin.com\/company\/14613\/admin\/\"]},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.vendavo.com\/#\/schema\/person\/29d5eac51cc33b77096880b2464da495\",\"name\":\"Vendavo\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/secure.gravatar.com\/avatar\/4ff4e57200a7b0d3a1eb288e009aaa5bdc21b0ea6f02548635d43b4855923f68?s=96&d=mm&r=g\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/4ff4e57200a7b0d3a1eb288e009aaa5bdc21b0ea6f02548635d43b4855923f68?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/4ff4e57200a7b0d3a1eb288e009aaa5bdc21b0ea6f02548635d43b4855923f68?s=96&d=mm&r=g\",\"caption\":\"Vendavo\"},\"description\":\"Vendavo powers the shift to digital business for the world\u2019s most demanding B2B companies, unlocking value, growing margin and accelerating revenue. With the Vendavo Commercial Excellence platform, companies develop dynamic customer insights and optimal pricing strategies that maximize margin, boost sales effectiveness and improve customer experience. With an annual margin improvement totaling more than $2.5 billion across companies in chemicals, distribution, high-tech and manufacturing, Vendavo delivers cutting-edge analytics and deep industry expertise that help companies stay one step ahead. Vendavo is headquartered in Denver, CO and has offices around the globe.\",\"url\":\"https:\/\/www.vendavo.com\/author\/venadmin\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Opportunity of Value Based Pricing | Vendavo","description":"Pricing professionals now rely on both high-impact, dynamic data and sophisticated solutions that have powered a dramatic shift","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.vendavo.com\/pricing\/the-opportunity-in-value-based-pricing\/","og_locale":"en_US","og_type":"article","og_title":"Opportunity of Value Based Pricing | Vendavo","og_description":"Pricing professionals now rely on both high-impact, dynamic data and sophisticated solutions that have powered a dramatic shift","og_url":"https:\/\/www.vendavo.com\/pricing\/the-opportunity-in-value-based-pricing\/","og_site_name":"Vendavo","article_publisher":"https:\/\/www.facebook.com\/Vendavo","article_published_time":"2019-09-12T07:18:36+00:00","article_modified_time":"2023-06-12T07:29:51+00:00","og_image":[{"width":910,"height":480,"url":"https:\/\/www.vendavo.com\/wp-content\/uploads\/2019\/09\/Busy-office-1.jpg","type":"image\/jpeg"}],"author":"Vendavo","twitter_card":"summary_large_image","twitter_creator":"@vendavo","twitter_site":"@vendavo","schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":["Article","BlogPosting"],"@id":"https:\/\/www.vendavo.com\/pricing\/the-opportunity-in-value-based-pricing\/#article","isPartOf":{"@id":"https:\/\/www.vendavo.com\/pricing\/the-opportunity-in-value-based-pricing\/"},"author":{"name":"Vendavo","@id":"https:\/\/www.vendavo.com\/#\/schema\/person\/29d5eac51cc33b77096880b2464da495"},"headline":"The Opportunity in Value-Based Pricing","datePublished":"2019-09-12T07:18:36+00:00","dateModified":"2023-06-12T07:29:51+00:00","mainEntityOfPage":{"@id":"https:\/\/www.vendavo.com\/pricing\/the-opportunity-in-value-based-pricing\/"},"wordCount":426,"publisher":{"@id":"https:\/\/www.vendavo.com\/#organization"},"image":{"@id":"https:\/\/www.vendavo.com\/pricing\/the-opportunity-in-value-based-pricing\/#primaryimage"},"thumbnailUrl":"https:\/\/www.vendavo.com\/wp-content\/uploads\/2019\/09\/Busy-office-1.jpg","keywords":["Price Optimization"],"articleSection":["Pricing"],"inLanguage":"en-US"},{"@type":"WebPage","@id":"https:\/\/www.vendavo.com\/pricing\/the-opportunity-in-value-based-pricing\/","url":"https:\/\/www.vendavo.com\/pricing\/the-opportunity-in-value-based-pricing\/","name":"Opportunity of Value Based Pricing | Vendavo","isPartOf":{"@id":"https:\/\/www.vendavo.com\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.vendavo.com\/pricing\/the-opportunity-in-value-based-pricing\/#primaryimage"},"image":{"@id":"https:\/\/www.vendavo.com\/pricing\/the-opportunity-in-value-based-pricing\/#primaryimage"},"thumbnailUrl":"https:\/\/www.vendavo.com\/wp-content\/uploads\/2019\/09\/Busy-office-1.jpg","datePublished":"2019-09-12T07:18:36+00:00","dateModified":"2023-06-12T07:29:51+00:00","description":"Pricing professionals now rely on both high-impact, dynamic data and sophisticated solutions that have powered a dramatic shift","breadcrumb":{"@id":"https:\/\/www.vendavo.com\/pricing\/the-opportunity-in-value-based-pricing\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.vendavo.com\/pricing\/the-opportunity-in-value-based-pricing\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.vendavo.com\/pricing\/the-opportunity-in-value-based-pricing\/#primaryimage","url":"https:\/\/www.vendavo.com\/wp-content\/uploads\/2019\/09\/Busy-office-1.jpg","contentUrl":"https:\/\/www.vendavo.com\/wp-content\/uploads\/2019\/09\/Busy-office-1.jpg","width":910,"height":480},{"@type":"BreadcrumbList","@id":"https:\/\/www.vendavo.com\/pricing\/the-opportunity-in-value-based-pricing\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.vendavo.com\/"},{"@type":"ListItem","position":2,"name":"The Opportunity in Value-Based Pricing"}]},{"@type":"WebSite","@id":"https:\/\/www.vendavo.com\/#website","url":"https:\/\/www.vendavo.com\/","name":"Vendavo","description":"Unlock Growth + Profitability","publisher":{"@id":"https:\/\/www.vendavo.com\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.vendavo.com\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/www.vendavo.com\/#organization","name":"Vendavo","url":"https:\/\/www.vendavo.com\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.vendavo.com\/#\/schema\/logo\/image\/","url":"https:\/\/www.vendavo.com\/wp-content\/uploads\/2021\/02\/vendavo-logo-events.jpg","contentUrl":"https:\/\/www.vendavo.com\/wp-content\/uploads\/2021\/02\/vendavo-logo-events.jpg","width":416,"height":250,"caption":"Vendavo"},"image":{"@id":"https:\/\/www.vendavo.com\/#\/schema\/logo\/image\/"},"sameAs":["https:\/\/www.facebook.com\/Vendavo","https:\/\/x.com\/vendavo","https:\/\/www.linkedin.com\/company\/14613\/admin\/"]},{"@type":"Person","@id":"https:\/\/www.vendavo.com\/#\/schema\/person\/29d5eac51cc33b77096880b2464da495","name":"Vendavo","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/secure.gravatar.com\/avatar\/4ff4e57200a7b0d3a1eb288e009aaa5bdc21b0ea6f02548635d43b4855923f68?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/4ff4e57200a7b0d3a1eb288e009aaa5bdc21b0ea6f02548635d43b4855923f68?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/4ff4e57200a7b0d3a1eb288e009aaa5bdc21b0ea6f02548635d43b4855923f68?s=96&d=mm&r=g","caption":"Vendavo"},"description":"Vendavo powers the shift to digital business for the world\u2019s most demanding B2B companies, unlocking value, growing margin and accelerating revenue. With the Vendavo Commercial Excellence platform, companies develop dynamic customer insights and optimal pricing strategies that maximize margin, boost sales effectiveness and improve customer experience. With an annual margin improvement totaling more than $2.5 billion across companies in chemicals, distribution, high-tech and manufacturing, Vendavo delivers cutting-edge analytics and deep industry expertise that help companies stay one step ahead. Vendavo is headquartered in Denver, CO and has offices around the globe.","url":"https:\/\/www.vendavo.com\/author\/venadmin\/"}]}},"taxonomy_info":{"category":[{"value":1240,"label":"Pricing"}],"post_tag":[{"value":1249,"label":"Price Optimization"}]},"featured_image_src_large":["https:\/\/www.vendavo.com\/wp-content\/uploads\/2019\/09\/Busy-office-1.jpg",910,480,false],"author_info":{"display_name":"Vendavo","author_link":"https:\/\/www.vendavo.com\/author\/venadmin\/"},"comment_info":"","category_info":[{"term_id":1240,"name":"Pricing","slug":"pricing","term_group":0,"term_taxonomy_id":1241,"taxonomy":"category","description":"","parent":0,"count":245,"filter":"raw","cat_ID":1240,"category_count":245,"category_description":"","cat_name":"Pricing","category_nicename":"pricing","category_parent":0}],"tag_info":[{"term_id":1249,"name":"Price Optimization","slug":"price-optimization","term_group":0,"term_taxonomy_id":1250,"taxonomy":"post_tag","description":"","parent":0,"count":74,"filter":"raw"}],"_links":{"self":[{"href":"https:\/\/www.vendavo.com\/wp-json\/wp\/v2\/posts\/22795","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vendavo.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vendavo.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vendavo.com\/wp-json\/wp\/v2\/users\/24"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vendavo.com\/wp-json\/wp\/v2\/comments?post=22795"}],"version-history":[{"count":0,"href":"https:\/\/www.vendavo.com\/wp-json\/wp\/v2\/posts\/22795\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vendavo.com\/wp-json\/wp\/v2\/media\/38362"}],"wp:attachment":[{"href":"https:\/\/www.vendavo.com\/wp-json\/wp\/v2\/media?parent=22795"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vendavo.com\/wp-json\/wp\/v2\/categories?post=22795"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vendavo.com\/wp-json\/wp\/v2\/tags?post=22795"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}