Fundamentals to performance-based pricing Performance-based pricing is "insurance" that the seller does not undercharge the buyer Save to calendar

Performance-based pricing is an arrangement in which the seller is paid based on the actual performance of its product or service. It is becoming much more popular. It guarantees when suppliers provide more, they will earn more. Buyers also receive insurance through paying only for the performance delivered. With performance-based pricing, suppliers get the opportunity to manage customer value and be closely involved with generating additional profits for both sides. With the risks come added revenue and profit opportunities for the suppliers. One advantage of performance-based pricing is the often-mentioned alignment that can be achieved between the buyer´s goals and the seller´s goals. But, that is only part of the story. There are two other major advantages. Performance-based pricing is insurance. It insures that the seller does not undercharge the buyer. When the final performance of the service or product is in doubt, the performance-based arrangement guarantees that as the seller provides more, it is paid more. Significantly, the buyer also receives insurance that it will not overpay at both the institutional and the individual level. No person or organization wants to pay more for a product or service than it is worth. Again, when performance delivery is in doubt, performance-based pricing enables the buyer to pay only for the amount of performance that is actually delivered on a measurable basis. Most importantly, the individuals responsible for the actual purchase decision do not want to absorb the career risk of overpaying. In our personal lives, if we overpay for a product, we suffer some marginal consequence. In business, it can literally end the job security of a procurement executive. For its insurance role, performance-based pricing creates a greater sense of "fairness" for both buyer and seller. The third benefit may be even more important than the first two. We often see performance-based pricing in highly uncertain situations, and where both buyer and seller must make complex trade-offs among conflicting objectives. Simple contractual arrangements do not force the buyer and seller to communicate in depth to one another. Performance-based pricing arrangements are generally very intricate. The parties are forced to deal with one another´s limitations, objectives, and trade-offs. The very process of discussing, in precise detail and with great discipline, these issues develops "wide-band width" communication between buyer and seller. Each has the opportunity to precisely present its objectives, and to explain its own issues. •  Keynote speakers Will be announced shortly •  Schedule Program will be announced shortly •  Where? De Baak, Landgoed De Horst De Horst 1 3971 KR  Driebergen •  When? 18/11/2010 •  For whom? General management, sales -, marketing -, product- and finance managers, pricing professionals/experts, Business Decision Makers, Commercial Management, New Business development, Market Research, HR Managers. European Pricing Platform participants have free access to the workshop. Non-participants pay € 330.00 excluding VAT. (*) To guarantee optimal learning effects ePP workshops are limited to 30 participants. Make sure you register on time, to avoid disappointments!