JetBrains Marketplace Help

Value-Based Pricing

The goal of value-based pricing is to figure out how much your potential customers are willing to pay for a product / plugin.

Instead of looking inwardly at your costs, or towards your competitors, with value-based pricing this time you look outward. You go out and ask your potential customers what value they see in your product.

Pros Cons
The price reflects customers’ willingness to pay It takes time to gather information from customers
You get to know your customers The value-based price might not fully consider your costs

Overall, there are two major ways that a product or service can create value for customers:

  • It helps increase customers’ revenue
    • by increasing the number of their paying users

    • by increasing the customer retention rate

    • by increasing the average revenue per customer

  • It helps decrease customers’ expenses
    • by saving their costs

    • by saving their time

Consider answering these questions to understand how much value your product or service creates for your customers:

  • What pain points will the customer solve with a product / plugin?

  • What product / plugin feature is the least valuable for the customer?

  • What product / plugin feature is the most valuable for the customer?

  • What is the price that a customer wants to pay for the product / plugin?

  • What is the price that a customer is willing to pay for the product / plugin?

It is also worth checking your potential customers’ price sensitivity by asking these questions:

  • At what price would the customer consider the product too expensive?

  • At what price would the customer consider the product to be so cheap that they would not consider it?

  • At what price would the customer consider the product to start to get expensive?

  • At what price would the customer consider the product to be a ‘good value’?

Sources: Price Intelligently SaaS Pricing Strategy, The Anatomy of SaaS Pricing Strategy, The Power of Experimental Pricing, Toptal, Hubspot, Getcheddar Cost-Based Pricing, Medium, Getcheddar Value-Based Pricing, Price Intelligently

Last modified: 20 October 2020