How Utility and Value Affect Pricing

Man's hand drawing upward arrow with words "value for money"Shift the focus away from the service provided, and think about the 8 kinds of utility.

By August J. Aquila
Price It Right

If indeed we believe the phrase “perception is reality,” then it is the client’s perception that is the only reality. Ultimately, only a client can determine the value of your service, that is, the fee he or she is willing to pay. If the client perceives that he or she has received a benefit there will be some perceived value attached to the service.

MORE: The Four Types of Competition | How Demand Affects Pricing | How to Shift from Production to Marketing Orientation | How Traditional Fee Methods Hurt Firms
GoProCPA.comExclusively for PRO Members. Log in here or upgrade to PRO today.

Consciously or unconsciously, the client’s determination of the correct fee for a service is related to two concepts: utility and value. Let’s look at these two concepts and how they apply to setting prices.