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Profit from lowering your clients' exposure to danger.

Profit from lowering your clients' exposure to danger.

October 21, 2022

In this issue, you’ll learn:

How to charge based on how much risk you take.
It depends if you have enough customers who have higher probability of this risk.

Time to read: two minutes.

Types of value propositions

Today, we will talk about what's in bold in the list below.

Price
Cost reduction
“Getting the job done”
Risk reduction
Customization
Accessibility
Convenience/usability
Performance
Design
Newness
Brand/status

Risk reduction

It is When your business model is directly linked to how your target customer reduces their risks.

Hardware and product guarantees and service level agreements (SLA) are examples. The most famous one is insurance.

Apple Care

AppleCare+ covers You for repair or replacement of Your device in the event of Accidental Damage or Battery Depletion and access to Technical Support from Apple

For example, if a customer's iPhone 13 Pro Max was lost or stolen and they had AppleCare+ with theft and loss coverage, they could file a claim for a replacement iPhone for a €129 fee instead of having to purchase a new iPhone outright for over €1,200. In France, Italy, and Spain, theft and loss claims are handled by the insurance company AIG.

AppleCare+ with theft and loss coverage costs up to an extra €60 upfront or up to an extra €3 per month compared to the standard AppleCare+ plan.

AppleCare+ With Theft and Loss Coverage for iPhone Now Available in Three Additional Countries - MacRumors — www.macrumors.com

AppleCare+ with theft and loss coverage is available in three additional countries starting today, including France, Italy, and Spain. In addition...

Is it worth it?

The customer with the highest probability and impact of the risk you are sharing is your ideal customer.

In our AppleCare example, if you are prone to dropping or damaging your device, the argument moves towards adding AppleCare+.

Similarly, additional loss and theft coverage will be dependent on how likely you believe you are to lose your device or have it stolen.

Ultimately, some users are simply more careless with their devices, and for those people, AppleCare+ is worth it.

Wrap-up

Establish your prices in accordance with the risk you alleviate from your customers.
The higher the probability and impact the higher you could charge.