Is innovation in pricing your next source of competitive advantage?

Few companies treat innovation in pricing as seriously as product innovation or business model innovation. However, after interviews with 50 executives and the analysis of pricing practices of 70 companies worldwide, our research suggests that innovation in pricing may be a company's most powerful—and, in many cases, least explored—source of competitive advantage. Innovation in pricing brings new-to-the-industry approaches to pricing strategies, to pricing tactics, and to the organization of pricing with the objective of increasing customer satisfaction and company profits; too many companies today see pricing as a win/lose proposition between themselves and their customers. Innovation in pricing breaks this deadlock and shows how to increase profits and customer satisfaction conjointly. As a result of our research, we present a canvas laying out more than 20 possible avenues for innovation in pricing, offering to any organization—regardless of size, industry, or nationality—a few key ideas on how to increase both profits and customer satisfaction.