How To Prioritize Features That Get Customers To Buy: Understanding What Influences Willingness To Pay

SourceForbes
SectorEconomy
CountryJordan

In the battle to win customer’s hearts and minds, marketers develop a go-to-market strategy based on the five P’s of marketing; product strategy, price strategy, promotion, placement, and packaging (some will use similar variations, but the concept holds). While a great pricing strategy is built around balancing revenue, retention, and growth, companies often overlook a crucial aspect of developing pricing tiers and feature roadmaps: understanding which feature sets the market is willing to pay for.  Often, customer discoveries and market research processes reveal which features customers value and what competitive alternatives charge in the market, but not how the bundling of features into tiers drives optimal value while mitigating the friction of confusing pricing tiers, or freemium trap of not segmenting by the value each buyer persona perceives. Willingness to Pay (WTP) is the highest price a customer is willing to pay for products and services in a particular context. For instance, a consumer will pay more for water and soda from a mini bar in a hotel than in a supermarket.

A young business executive may elect to pay more for an airline seat when traveling for business than traveling for pleasure, especially if their ticket is paid for ...read more...