Value pricing when you understand your customers: Total cost of ownership – Past, present and future

At the heart of pricing and selling in the twenty‐first century is the ability to price based on created value. In this context, total cost of ownership (TCO) plays an important role. Historically, both academics and practitioners have included exclusively elements related to cost reductions in TCO calculations. In this article, we point toward emerging practices of including not only cost elements, but also all differentiating elements that contribute to customer value in TCO calculations.