What is a Value-Based Pricing System?

The large IT suppliers and their customers have established long-term business partnerships to deliver the solution standards and service levels necessary to run a business. This produces vital operational efficiency for companies, but gives away the buyer's most powerful card in the "Pricing Game."

The price a customer pays depends on how much a particular IT solution is worth to that customer. Once established, IT standards are worth a premium. The large incumbent IT suppliers and their sales teams have perfected a value-based pricing system to capitalize on this leverage and maximize revenue and profits from their customer base.

Suppliers are winning because they engage early, with great discipline and a long-term view, to neutralize the buyer's strengths, minimize their weakness and avoid battles over price and terms. Traditional procurement best practices such as competitive bidding and tough negotiation are no match for these Value-Based Pricing Game strategies.

Customers need a Value-Based Buying Strategy of their own if they want to level the playing field.

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