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The VETOB Framework
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The Value Exchange Trade-Off Boundary (VETOB) model is our proprietary framework that has served as the bedrock of our work since the firm's 2014 inception. The framework is depicted in detail in our upcoming book "Build Your Pricing Power!".
Why the VETOB framework is unique
The VETOB Framework presents a uniquely comprehensive view of pricing/value capture. It cohesively integrates all important aspects of price management and value capture, from value creation/communication, financial/profitability management, competitive and general business strategy, price setting/optimization, pricing psychology, as well as price getting and execution. It is a uniquely robust and powerful framework because:
- The model's basic operation can be grasped quite easily, thanks to the distinctive, powerful graphical representation of the pricing/value capture problem not found elsewhere in other pricing literature.
- Despite its relative simplicity, the framework is likely the most comprehensive model in existence, in terms of the breadth of its coverage of the many aspects of the pricing/value capture problem.
- This cohesive model makes explicit, very strong linkages among seemingly disjointed areas, thereby presenting an integrated view of the pricing/value capture problem.
- Though the model is built on strong academic foundations, it can be readily operationalized, thanks to being supported by a comprehensive, robust set of underlying tools and techniques with proven, real-life applicability.
The VETOB model is a paradigm-shifting framework. It is likely to transform anyone's perspective on pricing and value capture when they are first introduced to it, well-seasoned pricing professionals included.
What makes the VETOB framework especially useful for practitioners
The VETOB framework was created by practitioners, for practitioners. While it was built on solid academic foundations, it was developed to help guide and structure systematic, real-life price improvement efforts:
- As noted before, the model is supported by a robust set of underlying toolset with proven, real-life applicability. The VETOB Pyramid is a graphical representation of this comprehensive, universally applicable toolset. Practitioners can use the VETOB Pyramid as a quick and practical reference guide, to help identify proven methods of driving meaningful improvement in pricing and value capture processes in virtually any business organization.
- As also noted before, the VETOB framework offers a holistic, integrated view of pricing and value capture. Taking such as view can be paramount to success in pricing: a key reason many pricing initiatives fail is that they excessively focus on only one area (such as analytics, for instance). Other considerations that might not receive enough attention often include operational adoption/stakeholder buy-in, fit with existing/available systems, and alignment with strategic growth objectives. When properly applied, the VETOB framework not only calls for these factors to be duly considered, but it also provides meaningful guidance on how to successfully navigate through the complexities involved in typical undertakings. Accordingly, using the framework greatly increases the chances of success pricing projects generally, and of transformational pricing initiatives especially.
- The VETOB framework can be used as a state-of-the-art assessment tool. For instance, we use it to structure our "Value Exchange Trade-Off Boundary (VETOB) Pricing Due Diligence" service offering, where we assess the pricing and value capture capabilities of targets in M&A contexts. Most businesses are in various stages of developing their pricing capabilities, and improvements are typically possible in several areas. Often, capabilities may be enhanced by improving analytics, by enhancing reporting tools, by more closely aligning incentives, and by instilling a more value-based pricing mentality. The VETOB framework offers a systematic way of identifying areas of strengths and weaknesses. Additionally, it can also be used to build an effective roadmap to drive improvement, and define the organization's path in its journey towards pricing excellence. In fact, the framework serves as the backbone of our "Value Exchange Trade-Off Boundary (VETOB) Pricing Roadmap Development" service offering.
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