Using SIMALTO To Price Effectively

Finding out what people value lies at the very heart of successful pricing research. Yet establishing the value that people place on the goods and services they sell is one of the most difficult tasks for the business-to-business marketer. If they pitch their price too high then quite clearly they will lose out to the competition. Equally, if the price is too low, the company is in danger of leaving money on the table for the customer.

For most b-to-b marketers, finding the right price is a judgment which many get badly wrong – usually charging too little because they don’t realize the value of their offerings. What we really need is a tool to help us measure value.

Three main tools exist for measuring value. Each has its own merits and may be utilized in different circumstances:

1. Points Spend
   A very simple approach is to present the buyer with a list of the benefits and ask him/her to indicate their relative importance by spending a number of points according to which are most valued.  The points-spend gives a rough indication of how buyers see value in the products and services they buy.  This is a relatively crude and unsophisticated approach to researching price and value.
   
   
2. Conjoint Analysis
   This is a long-established technique used by market researchers for assessing the value of different elements of an offering.  However, even with relatively simple conjoint concepts it is necessary to interview a minimum of 200 respondents in order to obtain an accurate result, and most statisticians would look for at least twice this number.  Conjoint analysis is not, therefore, without its problems for the business-to-business researcher.
   
   
3. SIMALTO
   The third and most powerful tool we recommend is SIMALTO.  SIMALTO helps you to understand how your offering is valued, and can be an essential tool in investigating value in business-to-business situations.