In the previous part of the articles’ series we discussed the way to integrate pricing practice in your company. But how can you turn pricing to a competitive advantage?
3. PRICING AS A COMPETITIVE ADVANTAGE
Pricing Excellence at its peak can allow a company to renew and differentiate its offering beyond product and service features, through innovative pricing models.
Such models are usually tailored as much as possible to specific product features and customer needs, to better reinforce product’s positioning and leverage on its points of strength.
During past years, we supported several Life Sciences Companies in designing and implementing a number of innovative pricing models (Figure 8):
- RISK SHARING: split the risk of product adoption, safety and effectiveness between developer (Life Sciences company), and the Healthcare Delivery Systems
- PAY-FOR-PERFORMANCE: allow Healthcare Delivery Systems to pay for the effective value of the product, once health outcomes are realized and proportionally to outcomes
- PRODUCT-AS-A-SOLUTION (PAAS): commercialize integrated healthcare solutions, made up both of products and services, linking price to the value created by the synergic bundle
Figure 8: Innovative Pricing Models
Due to the replicability of some of the innovative Pricing models, first-mover position is crucial for capturing all advantages that come with them.
The next and last part of this articles’ series is a fascinating interview with a Tefen client, Simone Leone, Sales and Pricing Excellence Director at Boston Scientific. In the interview Mr. Leone told us about the process of implementing a new Pricing model, its benefits to the company, and more.
Written by Paolo Correale, a Director at Tefen Italy, and the Head of Pricing at global level