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Insight: The Future of Pricing Models

Jun 05, 2019

Servitization

May 17, 2019

Servitization is the new trend for future pricing models. Creating competitive differentiation with your competitors, increasing customer value and involvement, flexibility and including the opportunity cost of the full life cycle of the services being provided, must be incorporated in the pricing structure. 

Market segments are to be considered when the pricing structure is being developed. Selling off pilot programs to gain the customer’s trust will create a precedence in the pricing of services. According to Strategy Consultants, Simon-Kutcher and Partners, 80% of companies think that TopLine growth in pricing is key, but in hindsight, customizing to the customer’s need is key.   This allows you to benchmark what the value of the service is to the customer and to better market the value of the service moving forward. 

The value of a product or service needs to be sold during the sales process. This would be the salesperson’s job and not the negotiator. The negotiator uses the value sold as leverage to apply tactics to close the deal and come to an agreement, as well as groom the customer for future negotiations.