How To Price For B2B | Startup School

TL;DR

Pricing for B2B should be driven by a value equation: calculate the monetary value (cost savings, time savings, or revenue increase) your product delivers to the customer, then charge 25–50% of that value (roughly one-third). Cost is only a floor, competition should be handled via differentiation rather than price wars.

Key insights

• The value equation must be written down with the champion (internal buyer) and challenged to validate assumptions; it also provides success metrics for pilots.
• Companies value cost savings, time savings (which is cost saving), or revenue increases – those are the three levers for value quantification.
• Pricing at cost-plus or starting with cost leads to under-pricing; cost is only a floor, never a starting point.