The 2020 Mid-Year Economic Update_long

Tip: Place Higher Value on the Unique Knowledge You Offer

Customers will pay if your knowledge provides measurable savings.

New knowledge can be worth a fortune. If relatively few people have the knowledge required to perform a service, make sure you're using a value-based pricing model to capitalize upon the knowledge you have, writes Todd Youngblood in Selling Services When Nobody has Money to Spend.

If a service will save the customer $1,000, it would be logical to pay $900 for it. Even if it only costs you $10 to provide the service, the customer is better off.

Value has absolutely nothing to do with what it costs you to deliver a service, Youngblood says. Services are based on the knowledge required to execute a process. The value of knowledge varies immensely over time.

If, after a few years, a large number of people have picked up the knowledge to provide that same service, a cost-based pricing model will become necessary. But the trick to maintaining your profitability is to properly manage the transition from value-based to cost-based, or commodity, pricing. Move too quickly and you leave money on the table. Move too slowly and your competitors will outbid you and take the business.

About the Author
Leave a Reply

Leave a Comment

Sign Up for the MDM Update Newsletter

The MDM update newsletter is your best source for news and trends in the wholesale distribution industry.

By subscribing, you are agreeing to MDM’s Privacy Policy.


articles left

This is your last free article

Subscribe to MDM Premium today and get:

  • Unlimited access to
  • 1 year digital subscription, with new issues twice a month
  • Trends analysis, market data and quarterly economic updates
  • Deals on select store products and events


articles left

Want more Premium content from MDM?

Subscribe today and get:

  • New issues twice each month
  • Unlimited access to, including 10+ years of archived data
  • Current trends analysis, market data and economic updates
  • Discounts on select store products and events



You have one free article remaining

Subscribe to MDM Premium to get unlimited access. Your subscription includes:

  • Two new issues a month
  • Access to 10+ years of archived data on
  • Quarterly economic updates, trends analysis and market data
  • Store and event discounts

To continue reading, you must be an MDM Premium subscriber.