If our product directly increases a customer’s revenue or saves them money, could we price it as a percentage of that benefit (outcome-based pricing)? Will customers accept that, or do they prefer fixed pricing even if ROI is high?

Based on our book, Price to Scale, outcome-based pricing is certainly an intriguing concept. In theory, pricing your product as a percentage of the revenue or savings you help create (for example, asking for 1% to 10% of the benefit) can seem attractive. It aligns your pricing with the value delivered to the customer. However, the book also highlights several practical challenges:

• Measurement Difficulties – As noted in Price to Scale, accurately measuring the true return on investment is very challenging. Soft costs, switching costs, and variability in ROI make it difficult to justify a percentage-based fee when year-end numbers don’t match the theoretical figures.

• Pricing Justification vs. Price Setting – Our book explains that while ROI is an effective tool for justifying value, it is rarely used as a direct pricing mechanism. The risk is that you—and your business—will bear the burden of reconciling these ROI calculations later.

• Customer Preferences – Experience suggests that despite a high ROI, customers tend to favor fixed pricing models. A set price provides clarity and predictability, reducing the potential friction that might arise from an outcome-based model where benefits are hard to quantify or dispute.

In summary, while outcome-based pricing can theoretically align your interests with those of your customer, most practical experiences—as discussed in Price to Scale—indicate that fixed pricing is generally preferable due to its simplicity and ease of justification. It may be more effective to use ROI as a communication tool rather than the basis for your pricing strategy.