Economic value to the customer built as a stacked bar, with

Economic value to the customer built as a stacked bar, with Economic value to the customer built as a stacked bar, with cost floor, reference value, positive and negative differentiation, EVC ceiling and the price corridorYour priceCost to servethe floorReferencenext bestalternative+ Positivedifferentiation− NegativedifferentiationEVCthe ceilingValue left withcustomerValue youcapturePrice sits in the corridor between cost and EVC. Where it sits is a strategychoice.

Economic value to the customer. Start from the honest next best alternative, add what you do better and subtract what you do worse, in money. The gap between your price and EVC is the customer's reason to buy.