Custom Value in Pricing

Custom value is a pricing method that´s used with customized products.

Whether you´re selling cars or cakes, customization can add lots of value to a product. The reason for this is simple, customized products have a higher sentimental value


Buying a new car feels good. However, buying a new one that has been customized to your specific needs feels much better. Most people are willing to pay more money for a customized item, and this is where the custom value pricing comes into play. Using this pricing method, you can figure out the right price for your customized goods.

When calculating the custom value price of a product, there are many factors that should be taken into consideration. A customized product varies from a non-customized one in terms of the actual cost as well as how much are people willing to pay for it.

Important considerations

The following are important things that you should always keep in mind when using custom value pricing. By doing so, you will increase your incremental profit and make the whole pricing process much easier.

Indirect costs

When an item is customized, there are many indirect costs that should be accounted for. Asides from the cost of the basic item, the cost of the additional customization must be added to the total price. This could include anything from the labor costs to the parts used for customizing the product. The complexity of a customization job affects the difficulty of calculating the added costs. Whether you’re selling customized shoes or cars, make sure to calculate all the costs that go into the process. Remember that most customized products can’t be mass produced. Mass production makes creating a large quantity of a similar product cheaper. Being unique items, customized products don’t benefit from mass production and as a result, cost more money. This is only happening when you’re creating products that are customized for specific people though. If you’re creating products that are customized for a specific market segment, the production costs can be lower as the items are created in large quantities.

Perceived value

Most people are willing to pay much more to get a product that is tailored to their specific needs. That’s why the perceived value is very important when it comes to customized products. People tend to perceive custom items as much more valuable, even if the customization process itself doesn’t cost much money. To make the best use of the high perceived value of your custom products, you should find out how much are people willing to pay for them. By doing so, you’ll have an effective custom value price that ensures maximum profitability. As most people don’t know -or care- care how much a product costs, you can increase your profit margins by lowering your production costs.

Why make customized products?

Making customized products is a great idea. There are many benefits of creating products that are customized for a specific user or segment. Whatever industry you are in, you should always look for opportunities to create such products.

Higher profit margins

When it comes to regular products, people tend to compare prices all the time. However, if you’re selling a customized product with a unique offering, people perceive it in a different way. Compared to their traditional counterparts, most customized products have a higher emotional value. Having products with high emotional value translate into bigger profit margins. As most people don’t know -or care about- the actual cost of the customized product, this is a great opportunity that is just too good to miss. By setting a right custom value price, your business will reap the benefits.

Penetrating new markets

Creating customized products shows your customers that you really care about them. In addition to building precious customer loyalty, you can penetrate new segments in your market. Some user groups may not become your customers in the first place if it wasn’t for you customized offering. Let’s assume that you are a chocolate manufacturer. By creating a vegan-friendly version of your products, you can gain a group of customers who would have never used your products if there isn’t this new custom product. You will also gain their loyalty by showing support for their cause. This is applicable in almost all industries. By offering a customized product/solution, you can increase your profit margins and gain new customers.

How can Sniffie help?

Knowing how much to charge for customized products requires knowing its cost, the customization cost, and the perceived value. By knowing all these things, you’ll be able to set a price that appeals to your customers while giving you maximum profitability. Sniffie can help you do all that. With its price monitoring system, you can easily conduct a thorough market research to know where your prices stand compared to your competitors. Check out Sniffie’s features and our use cases to find out how Sniffie can help.

Want to learn more about pricing?

Are you keen to learn more about pricing? Head to our Pricing Academy, from there you can find our latest articles about pricing and other free resources related to pricing, be sure to check them out!

Sniffie Blog

Check out our latest blogs

Product Release – General Widget

NEW: Vastly improved analytics capabilities! We at Sniffie are beyond excited to tell you about our newest product release which includes the biggest improvements to

Read more