The Willingness to Pay (WTP) Ranking Tool

Abstract

Strategy Question: How do I understand my customers’ “willingness to pay” for my products or services?

Summary: We know our value proposition and what we are charging for our products or services. Are they in line? If not, a firm could be leaving money on the table on every sale, or conversely not even be asked to quote an opportunity. This tool helps to compare price, cost, and margin against the perceived value for each product/service form in key market segments. This tool will help to align the value proposition with the pricing structure. By comparing competitive pricing against the strengths defined by the value proposition, an understanding of customer’s willingness to pay can be defined.

Citation

Fairbanks, S. and Buchko, A. (2018), "The Willingness to Pay (WTP) Ranking Tool", Performance-Based Strategy, Emerald Publishing Limited, Leeds, pp. 143-155. https://doi.org/10.1108/978-1-78743-795-120181012