Overview

Challenges

Organizations are recognizing that outdated pricing methodologies, such as cost-plus, do not accurately reflect customer value. This survey insight sheds light on how companies are making the slow shift from traditional pricing models towards value-based and consumption-based strategies.

Summary

The survey insights indicate a critical need for businesses to shift from traditional pricing models, such as cost-plus pricing, to more innovative strategies that better reflect customer value. While many companies recognize this necessity, the transition to consumption-based and value-based pricing remains challenging. The insights urge organizations to embrace forward-thinking frameworks to improve profitability and customer satisfaction.

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Included in the full report

Traditional Pricing Limitations:

Cost-plus pricing remains dominant but is increasingly seen as outdated and inadequate in capturing true customer value.

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Emerging Pricing Models:

Companies are slowly adopting consumption-based and value-based pricing strategies, highlighting a trend towards models that align prices with outcomes.

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Need for Strategic Frameworks:

Organizations are encouraged to utilize TSIA’s Strategic Pricing Model Evolution to support the transition to forward-thinking pricing methods.

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Implementation Challenges:

The shift to innovative pricing models requires careful planning, including establishing effective metering and billing systems.

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Enhanced Communication Strategies:

Clear communication about the value proposition of new pricing models is essential for guiding customers through the transition.

Read the full report on the TSIA Portal

Publication date:

March 28, 2025

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