"Value For Money" Should Be Your New Pricing Strategy

Value For Money Pricing Strategy

In the 1930's Procter an Gamble and Kellogg's invented the value for money concept. They continue to develop their product strategies around what they consider to be the only three possible B2B or B2C behavioral market segments that exist:

1. Effectiveness buyers want to do more with the same resources
2. Efficiency buyers want to do the same with fewer resources
3. Economizers want to do less with far fewer resources

In the prior economy companies matched the product lifecycle stage with a variety of company-centric pricing strategies such as skimming, penetration, customary, etc. In our new economy all buyers will be driven by one of these three behaviors on an opportunity by opportunity basis, not for all of their purchases.

In order to be ready for the different colored light that is now visible at the end of the economic tunnel, successful companies must develop the competency for addressing the respective value-for-money behavior for each opportunity that enters their sales funnel.

"Value for Money" Buyers

Procter and Gamble and Kellogg's, inventors of the "value for money concept" in the 1930's, develop their product and pricing strategies around three behavioral personas:

1. Effectiveness buyers want to do more with the same resources
2. Efficiency buyers want to do the same with fewer resources
3. Economizers want to do less with far fewer resources

Through the early 2000's companies have profited from a variety of self-centered pricing strategies i.e. skimming, penetration, customary, etc. Our new digital and global economy has changed all that, so companies that do not directly address one of the three value-for-money behaviors will fail.

As we continue evolving, all buyers will be fully entrenched into one of these behaviors, but on an opportunity by opportunity basis, and not for all of their purchases.

So, if a company is unable to categorize sales opportunities in this fashion, it will not be ready for the different colored light that is visible at the end of the "funnel".