Overview

Challenges

The transition from traditional pricing models to more innovative, customer-centric approaches, is essential for aligning service offers with customer value. Despite the benefits, organizations are struggling to pivot. This report will review the notable challenges that we have observed across the industry, and proposes next steps for companies that are looking to pivot themselves.

Summary

The TSIA Offer Pricing Continuum report explores different pricing models and their significance in driving customer-centric approaches. It highlights the current transition from traditional pricing towards more innovative models like value-based and outcome-based pricing. While many companies show a willingness to adapt, significant challenges in measuring customer outcomes and effectively communicating value remain.

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Included in the full report

Pricing Models Defined:

Consumption-based, value-based, and outcome-based pricing models reflect various approaches to pricing services and products.

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Transition Stages:

Nearly 40% of companies are in the forward-thinking (value-based) phase, while 25% are in the consumption-based phase, indicating a shift from traditional models.

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Challenges Identified:

The primary obstacles in transitioning to new pricing models include measuring tangible customer outcomes and communicating that value effectively.

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Risk of Inaction:

Organizations hesitant to adopt new pricing strategies may misrepresent the value offered and risk losing competitive advantage.

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Importance of Research:

Continuous exploration and research into these pricing models are crucial for adapting and succeeding in the evolving technology industry.

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Publication date:

March 14, 2025

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