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Why Progressive Pricing Is Becoming a Competitive Necessity
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Why Progressive Pricing Is Becoming a Competitive Necessity



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Jean-Manuel Izaret and Just SchΓΌrmann, two senior partners at the Boston Consulting Group, ask you to imagine that your firm β€œcould measure, customize and charge for – in real time – the value your products or services create for each customer.” Then they reveal that what seems an impossible idea is already a reality. Learn what β€œprogressive pricing” is (and isn’t), and what four changes every firm must make to adopt this β€œcompetitive necessity.” 

Summary

Economic tradition posits a single, undifferentiated price for all who buy a product or service. Now β€œprogressive pricing” is challenging that tradition. Progressive pricing increases or decreases according to the value a customer gleans from the offering. Customers knowingly pay for a certain β€œlevel of value.” Soon, firms won’t have a choice in whether to adopt progressive pricing. The provider–consumer relationship is evolving toward measuring β€œdiscrete customer value,” making progressive pricing inevitable. Moreover, firms today can innovate at no marginal cost. Instead of upgrading physical products, they create...

About the Authors

Jean-Manuel Izaret and Just SchΓΌrmann are senior partners and managing directors at the Boston Consulting Group.


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