4. February 2020

How to calculate pricing of digital products

Digital products such as smart services are increasingly changing the traditional business in mechanical and plant engineering by generating new value creation potential.
While most companies are engaged in the development of digital products, they often neglect the introduction of adapted revenue models and fail to exploit the revenue potential; in the worst case, they lose touch with the competition. In the future, more integration of customers and customer information will be required for sound pricing and the decision for revenue models.
Accordingly, important customer-oriented questions must be answered within the pricing of digital products:
  • How can customer benefit be quantified?
  • How can a service be priced in a benefit-oriented manner?
  • How can the customer be successfully convinced of this price?

Examples of customer benefit-oriented pricing models are:

– The pay-per-performance pricing model of Heidelberger Druckmaschinen, in which the customer pays for each service rendered, in this case for the printed paper sheet.
– The Pay-Per-Hour price model of Rolls-Royce, where the customer pays for the flight hour with the turbine.

However, despite the high potential of value-based pricing, this approach is used in less than 20% of industrial companies, as it is often not clear how it can be used optimally in practice.

Together with the expert teams of the University of St. Gallen and the FIR at the RWTH Aachen University, we are devoting ourselves to this challenge. In nine months, we will work with you to create a concrete guideline for value-based pricing of digital products, tailored to the needs of your company and your products. In the consortium you will have the opportunity to analyse successful practices through case studies and to gain valuable contacts and insights in direct exchange with other companies.

In addition, you will benefit from our expertise in the development and market launch of digital products as well as from the experience of the project team and consortium partners.

Become part of our consortium now!