A Systemic and Relational Approach to Pricing Services

Pricing is an integral part of any service engagement. Pricing as a part of an engagement contract impacts engagement outcomes and influences operating models for service engagement execution. However, most of the pricing strategies popular in the services sector are extensions of the transactional pricing approaches used in the goods sector. The service paradigm is ‘relational’ in its approach to customer interaction as opposed to the manufacturing and goods paradigm, where the interaction with customers is ‘transactional.’ In this paper we present a framework for pricing business to business (B2B) services that take a relational and systemic approach. We have illustrated the applicability of the framework using the cases of IT production support services and infrastructure as a service (IaaS).