Value-based pricing is a strategy where the price is set based on how much your customers are willing to pay for the perceived value of your product or service—not based on production costs or competitor pricing.
Why it matters for startups
This strategy puts the user at the center. If you truly understand your customer’s pain points and how your product solves them, value-based pricing can unlock higher margins and stronger positioning. It shows investors you’re thinking beyond cost—you’re building for impact and retention.
How do I figure out what customers are willing to pay?
Start with surveys, interviews, and pricing experiments. Tools like Van Westendorp’s Price Sensitivity Meter can help.
Is value-based pricing better than cost-based pricing?
In most cases, yes—especially if you’re in a competitive or premium market. It reflects the real impact of your product.
What if different users perceive different value?
Then it’s time to segment. Consider tiered pricing, add-ons, or usage-based models to serve multiple user groups.
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