Value-based pricing special issue: Editorial

• Published in: Journal of revenue and pricing management 2017-02, Vol.16 (1), p.1-3
• Main Author: Liozu, Stephan M.
• Format: Article
• Language: English
• Subjects: Behavioral economics; Business and Management; Business to business commerce; Contingent fees; Customer satisfaction; Customers; Decision making; Editorial; Editorials; Management decisions; Marketing; Pricing policies; Value creation
• ISSN: 1476-6930; 1477-657X
• DOI: 10.1057/s41272-016-0058-9

There are three generally accepted orientations to pricing. They are commonly referred to as the 3 Cs of pricing cost-based, competition-based, and customer-value-based (Hinterhuber, 2004; Liozu, 2015). There is broad consensus among pricing scholars, consultants, and practitioners that a pricing orientation based on customer value and customer willingness-to-pay is best and can positively influence pricing power and firm performance (Forbis and Mehta, 1981; Dolan and Simon, 1996; Anderson and Narus, 1998; Cressman, 1999; Nagle and Holden, 2002; Ingenbleek et al, 2003). Although only 17 to 20 per cent of firms claim to have adopted value-based pricing (Hinterhuber, 2008; Liozu and Hinterhuber, 2013), awareness of it is increasing, as is the desire to move from cost-based and competition-based orientations to a more customer-value-centric pricing orientation. There are more and more papers published about customer-value- and value-based pricing. More stories of successful transformation are being presented at pricing and business conferences. More firms are piloting value-based pricing with specific projects and technology platforms. Thus, value-based pricing has emerged from the status of severely neglected pricing orientation and potential methodology to that of emerging orientation and methodology. Of course, there is additional room for improvement if value-based pricing is to reach a level of adoption similar to the Six Sigma and Lean methodologies, for example. But there is hope and momentum.