Customer Value in Pricing Strategy from Coursera

The traditional approach to pricing based on costs works to pay the bills, but it leaves revenue on the table. You can, in fact, price your products in a way that increases sales--if you know what your customers are willing to pay and can leverage psychology to create better deal and discount plans. In this course, we'll show you how to price a product based on how your customers value it and the psychology behind their purchase decisions. Developed at the Darden School of Business at the University of Virginia, and led by top-ranked Darden faculty and Boston Consulting Group global pricing experts, this course provides an in-depth understanding of value-based pricing and how to use it to capture more revenue.

By the end of this course, you'll be able to...

-- Apply knowledge of customer value to price products

-- Leverage core value-based pricing techniques to inform pricing decisions

-- Measure customer willingness to pay using models (surveys, conjoint analysis, other data)

-- Use knowledge of consumer psychology to set prices beneficial to both consumers and sellers

What's inside

Syllabus

Understanding Customer Value

Welcome to Week 1! We kick off the week with an overview of the course so that you'll know what to expect with an optional review of the specialization and three pricing lenses (watch these if you want a refresher). Then we'll dive into the content! This week, you'll learn about customer value--what it is and its relevance to pricing. You'll see how consumers make decisions--and why knowing consumers' willingness to pay is so important when setting a product's price. Next, we'll take a look at customer value in developing economies and how and why companies succeed (or not!) with value-based pricing in these markets. You'll finish the week with a solid understanding of "customer value" and how that impacts pricing strategy.

Implementing Value-based Pricing

Now that you have an understanding of customer value, let's dive into value-based pricing in greater depth. This week, we'll show you how to price to the demand curve using three tools: the price piano, the price ladder, and incentive curves. We'll take a look at customer value drivers in a B2B context and walk through a process to price a new product. Then Ron and Thomas will show you how price elasticity plays into value-based pricing. Implementing value-based pricing requires detailed analysis. Let's get started!

Measuring Customer Preferences

As you learned in Week 1, understanding customer willingness to pay (WTP) is critical for effective pricing. This week, we'll show you two ways to measure willingness to pay: surveys and conjoint analysis. You'll see how one company, Adios Junk Mail, used surveys to better understand WTP. Conjoint is a terrific tool, and we'll walk you through how it's used to determine product preferences and prices. You'll finish the week with a solid understanding of how to measure customer preferences and use this information in your pricing strategy.

Considering the Human Nature of Customers

Last week you considered pricing using a rational utility model. But humans are not always rational beings--and your pricing strategy needs to consider other behavioral drivers. We'll look at the psychology behind consumer purchase decisions and the mental accounting that impacts those decisions. Next we'll consider consumer price perceptions and ways to frame prices and create better deals and discount plans that work for both the consumer and the seller. Then, we'll take a look at two real-world cases, the Portland Trailblazers and Fidelity Investments so that you can practice using tools from throughout the course in a real-world case. You'll finish the course with fresh insights into value-based pricing and its applications.

Good to know

Know what's good

, what to watch for

, and possible dealbreakers

Introduces core value-based pricing techniques to help students make wiser decisions and adjust prices to match the demand curve

Taught by instructors from top institutions and consulting firms, providing legitimacy and credibility to course

Presents models for measuring customer preferences (e.g., surveys and conjoint analysis)

Provides real-world case studies to illustrate how concepts are applied

Requires some foundational understanding of the topic

Covers pricing across various markets (e.g., B2B and developing economies)

Reviews summary

Pricing strategy success

Learners say this well received course about pricing strategy from the University of Virginia Darden Business School and Boston Consulting Group covers pivotal topics in customer value with practical knowledge and entertaining professors. Assignments are engaging and thought provoking, although some learners wish there were more practical examples before completing assignments.

Assignments are thought provoking, but could have more examples

"It was a very nice course ..Learn very deep Insights about Customer value in Pricing Strategy."

"Great course. Feedback - in the final peer evaluated exercise, after we have got our grades, we should have access a sample completed exercise, so we can see the thought process as compared to our own. "

"More practical examples of conjoint analysis should be shown before hitting the assignment!"

Instructors are entertaining and knowledgeable

"Excellent course. Well delivered with a touch of humor."

"Great course and awesome teachers! Thank you so much. (:"

"Great course with excellent instructors. Clear language, lots of practical examples and important concepts about Pricing. I do recommend!!"

Provides practical knowledge and examples

"Best learning track"

"Great learning with practical and thought provoking assignments! "

"Excellent course on pricing. Too bad Demand Curve and Coinjoint analysis are not tools too often available in companies;-("

Covers key topics in customer value and pricing

"The course covers pivotal topics related to how consumers/customers/clients views price and related effects of which they are largely part of."

Activities

Be better prepared before your course. Deepen your understanding during and after it. Supplement your coursework and achieve mastery of the topics covered in Customer Value in Pricing Strategy with these activities:

Read 'Value-Based Pricing: A Practitioner's Guide' by Thomas T. Nagle

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Delve into a comprehensive guide that provides practical insights and actionable strategies for implementing value-based pricing.

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Read the book thoroughly and take notes on key concepts.
Participate in discussions or online forums to share insights and engage with other readers.

Review Introductory Economics

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Review the foundational principles of economics, including supply and demand, market equilibrium, and consumer behavior, to strengthen your understanding of value-based pricing.

Browse courses on Microeconomics

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Revisit textbooks or online resources on introductory economics.
Complete practice problems and exercises to reinforce your understanding.
Attend a refresher workshop or online course on economics.

Join a Value-Based Pricing Study Group

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Connect with fellow learners and engage in regular discussions to reinforce your understanding of value-based pricing and exchange ideas.

Browse courses on Pricing Strategies

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Find or create a study group with other participants in the course.
Establish a regular meeting schedule and agenda.
Take turns leading discussions and sharing insights.

Four other activities

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Analyze Case Studies on Value-Based Pricing

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Engage with real-world examples of how companies have successfully implemented value-based pricing strategies. This will provide practical insights and help you develop a deeper understanding of the concepts.

Browse courses on Case Study Analysis

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Gather case studies from various industries and markets.
Analyze the pricing strategies used in each case.
Identify the value propositions and customer insights that drove the pricing decisions.
Discuss the outcomes and lessons learned from the case studies in a group or forum.

Attend a Value-Based Pricing Workshop

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Participate in an interactive workshop led by industry experts to gain practical knowledge and network with professionals in the field of value-based pricing.

Browse courses on Pricing Strategies

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Research and identify reputable workshop providers.
Register for a workshop that aligns with your learning goals.
Actively participate in the workshop and engage with the instructors and attendees.

Develop a Value-Based Pricing Proposal

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Challenge yourself to apply the concepts of value-based pricing by creating a proposal for a real-world product or service. This will help you synthesize your knowledge and develop practical skills.

Browse courses on Value-Based Pricing

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Select a product or service that aligns with the course principles.
Conduct market research to understand customer needs and willingness to pay.
Develop a value proposition and justify your pricing strategy.
Create a presentation or written document to present your proposal.

Develop a Customer Value Assessment Tool

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Design and create a tool that enables you to assess the value that customers perceive in a given product or service, supporting your value-based pricing approach.

Browse courses on Pricing Strategy

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Identify the key factors that contribute to customer value.
Develop a survey or interview protocol to collect data on these factors.
Analyze the data and develop a scoring system to quantify customer value.
Create a user-friendly tool that incorporates the scoring system.

Career center

Learners who complete Customer Value in Pricing Strategy will develop knowledge and skills that may be useful to these careers:

Pricing Manager

A Pricing Manager is responsible for developing and implementing pricing strategies that optimize revenue and profit. With the knowledge learned in this course, specifically how to measure customer willingness to pay, Pricing Managers can tailor pricing strategies to the target market's perceived value. This course may also help build a foundation for Pricing Managers to leverage core value-based pricing techniques to inform pricing decisions.

See salaries and explore the career path for Pricing Manager

Product Manager

Product Managers are responsible for the development and management of products. Taking this course can teach Product Managers how to apply knowledge of customer value to price products. This course may also help Product Managers build a foundation for understanding customer willingness to pay and using this knowledge to set prices that are beneficial to both consumers and sellers.

See salaries and explore the career path for Product Manager

Marketing Manager

Marketing Managers are responsible for developing and executing marketing campaigns that promote products and services. This course can teach Marketing Managers how to leverage core value-based pricing techniques to inform pricing decisions. This course may also help Marketing Managers build a foundation for understanding customer value and developing effective pricing strategies.

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Sales Manager

Sales Managers are responsible for developing and managing sales teams. Taking this course can teach Sales Managers how to use knowledge of consumer psychology to set prices beneficial to both consumers and sellers. This course may also help Sales Managers build a foundation for measuring customer willingness to pay and using this information to close deals.

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Consultant

Consultants provide advice and guidance to businesses on a variety of topics, including pricing. Taking this course can teach Consultants how to apply knowledge of customer value to price products. This course may also help Consultants build a foundation for understanding core value-based pricing techniques and how to use them to inform pricing decisions.

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Financial Analyst

Financial Analysts are responsible for providing financial advice and guidance to businesses and individuals. Taking this course can teach Financial Analysts how to leverage core value-based pricing techniques to inform pricing decisions. This course may also help Financial Analysts build a foundation for understanding customer value and how to use this knowledge to make sound financial recommendations.

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Economist

Economists study the production, distribution, and consumption of goods and services. Taking this course can teach Economists how to measure customer willingness to pay using models. This course may also help Economists build a foundation for understanding how customer value impacts pricing strategy.

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Market Researcher

Market Researchers collect and analyze data about consumers and markets. Taking this course can teach Market Researchers how to use knowledge of consumer psychology to set prices beneficial to both consumers and sellers. This course may also help Market Researchers build a foundation for understanding customer value and how to use this knowledge to develop effective pricing strategies.

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Data Analyst

Data Analysts collect and analyze data to help businesses make informed decisions. Taking this course can teach Data Analysts how to measure customer willingness to pay using models. This course may also help Data Analysts build a foundation for understanding how customer value impacts pricing strategy.

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Business Analyst

Business Analysts help businesses identify and solve problems. Taking this course can teach Business Analysts how to apply knowledge of customer value to price products. This course may also help Business Analysts build a foundation for understanding core value-based pricing techniques and how to use them to inform pricing decisions.

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Software Engineer

Software Engineers design, develop, and maintain software systems. While not directly related to pricing, this course may help Software Engineers build a foundation for understanding how customer value impacts pricing strategy.

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Web Developer

Web Developers design and develop websites. While not directly related to pricing, this course may help Web Developers build a foundation for understanding how customer value impacts pricing strategy.

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Graphic designer

Graphic Designers create visual concepts for a variety of purposes. While not directly related to pricing, this course may help Graphic Designers build a foundation for understanding how customer value impacts pricing strategy.

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Customer Service Representative

Customer Service Representatives provide support to customers. While not directly related to pricing, this course may help Customer Service Representatives build a foundation for understanding how customer value impacts pricing strategy.

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Administrative Assistant

Administrative Assistants provide support to executives and managers. While not directly related to pricing, this course may help Administrative Assistants build a foundation for understanding how customer value impacts pricing strategy.

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