 
Question:
Isn't a customer's willingness to pay a good proxy for the value they receive?
Answer:
Not really. There are many reasons why willingness-to-pay may be less than value delivered. Among the most common are:
- The customer does not know enough about what the product can do, or the value of the benefits that it yields, to justify paying a value-based price. This calls for the seller to document and communicate the value, not cut the price.
- The customer does not believe that he or she needs to pay for the value since they have been rewarded in the past with lower prices for refusing to pay. This calls for creating a pricing strategy with price integrity, but with enough flexibility in the offer to enable price differences across customers where the value is really different.
- The price metrics do not track value. Price metrics are the units to which price is attached. Changing metrics to ones that are more value-based enables a company to capture more value from some customers, while still maintaining a perception of fairness. For example, the traditional price metric for pricing ads in newspapers is the column inch. But isn't the value of a classified ad for a $500K house more than for a $75K condominium? A more value-based metric might be a percent of the asking price, which is the metric that real estate agents use (charging 5-6% of the sales price). However, this could make billing too complicated; a compromise alternative might be to offer three sections: the regular real estate section, a section for "affordable homes", and a section for "homes of distinction", all at different prices.
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