In today's competitive environment, where companies aggressively pursue every opportunity to grow revenue and profit, executives continue to miss a critical insight that could significantly improve their bottom line performance - pricing more profitably doesn't mean having to raise prices. In our experience of working with clients in the software industry, we see that price metrics (the unit of measure for charging prices) represent one of the biggest payback opportunities, yet is most frequently overlooked. On a daily basis, purchases are made based on a predetermined unit of measure, what we call a “price metric”. The metric is the means by which a customer is charged for the use, purchase, or consumption of a product or service. Gasoline, milk, and paint are charged by the gallon. Long distance phone service is charged by the minute, concrete by the yard, and seafood by the pound. In identifying a price metric within a well-conceived pricing strategy, six critical elements are required. This presentation will review the critical elements of developing a successful price metric:

• Track with how customers realize value
• Delineate between customer segments that receive different levels of value
• Be both measurable and enforceable
• Support customer buying habits
• Leverage channel dynamics
• Manage the competitive environment