|Start Page Number:||18|
|End Page Number:||29|
|Publication Date:||Feb 2017|
|Journal:||J Revenue Pricing Manag|
While value‐based pricing remains the most talked about and taught pricing orientation, it is also the most difficult pricing orientation to deploy in organizations. For the past 5 years, scholars have continued to recommend the adoption of value‐based pricing while at the same time exploring the reasons for its continued low adoption and high rate of failure. We surveyed 144 pricing professionals in 144 distinct organizations to understand the current state of the value‐based‐pricing practice. We explore perceptions and challenges, and further validate the impact of value‐based pricing on margins. We also identify the key drivers of the impact of value‐based pricing on the business unit profitability and pricing power. Our results show that we still have a long road ahead with the increased adoption of value‐based pricing as a primary pricing orientation. While perceptions have improved, there remain critical difficulties in deploying this methodology in firms. With this study, we intended to continue the discussion on the necessity to pay attention to customer value and also provide additional knowledge to practitioners willing to get started on the journey toward pricing excellence.