MIT Sloan Management Review

Companies differ in their approaches to price setting, but most fall into one of three buckets: cost-based, competition-based or customer value-based. Customer value-based pricing uses data on the perceived customer value of the product as the main factor to determine prices.

However, implementing customer value-based pricing is not easy. Developing a customer value-based pricing program is a multiyear project demanding executive attention and requiring substantial changes in corporate processes.

In most large organizations, CEOs and senior management get the best technology and the best technology support, but this practice may actually put revenue at risk, according to two Unisys Corp. studies conducted over the last year.