The sales price is the value of the perceived benefit

Our bank requires us to use a one-time-password generator for on-line banking.
This solution is similar to the password tokens used by companies for remote access the network of the company.

The brand in the palm of your hand

The password generator comes with the logo and in the color of the bank.
The bank presents it as enhanced security, thus for safer transactions.

Whenever you want to do online transactions, you need to use the token.
This requires you to have it at hand.
Worse: if you want to use your online bank account you need to carry the password generator with you.
The result is that you carry the brand always with you: from the office to home, to even abroad.
The brand of the bank is always with you.
At the same time it builds trust. It connects the virtual world with a physical device you can hold.

Although the bank presents it to their customers as enhanced security, the branded device has really much more value for marketing: the brand in the palm of your hand.

Additionally other people will notice the use of it and remark the brand too.

Customer retention and nurturing value

So we wonder if the companies who design, market and sell these password generators are selling it for security or for marketing. Probably as security while these password tokens were designed and developed for this purpose.
However it is very likely the token has more value for branding than for security reasons.
This value should be calculated using the investments and expenses the bank typically makes in every customer for the retention and nurturing over the lifetime of the password generator (5 years or more?).
How does the customer retention and nurturing cost compares or exceeds the security risk cost?

If you sell a product or solution, you need to:
- Know the perception of the customer for the benefits it brings.
- Estimate the perceived value by the customer.
What are the costs or expenses your customer typically has for a certain problem that your product or solution solves too?

Although the methods or systems used can be completely different, it is the result in the end that counts for the customer at a certain price.
The customer has the choice between several alternative solutions for solving a problem.

The perception of the value by the customer

- The company selling the authentication devices brings the brand in the hands of the customers of the bank, which has probably a higher value compared to the difficult to calculate enhanced security value.

- Since long car manufacturers have understood the perceived value of their customers as the looks, the coolness or the importance of a car makes up a significant part of the price, allowing them to ask a premium price over their competitors.

- LEADSExplorer is not just revealing the company names of the website visitors, but it provides lead generation, customer retention and allows for optimizing nurturing and communications with leads and customers. The pricing needs to be compared with the total cost for outbound marketing (email campaigns), trade shows, advertising,…

You are probably in serious competition with vendors having almost the same solution in a certain market, but if you would know the perceived value for the benefits by the costumers you could price differently as your offering can be presented differently.

Valuate the perception of the benefits that can be different from the original purpose of your solution in order to define the sales price.