Case Detail

Case Summary

Trilogy Corporation: Customer Value-Based Pricing

Case Number: 5-104-041, Year Published: 2004

HBS Number: KEL106

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Authors: Mohanbir Sawhney; Paolo Cuomo; Ariel Hasson; Kevin Loftus; Angela Petros; Derek Yung

Key Concepts

Pricing Strategy, Value-Based Pricing, Gain Sharing, Principal Agent Problem, Adverse Selection, Innovation Adoption, Customer-Centric Organization Design, Change Management

Abstract

Steve Meyer, the chief marketing officer at Trilogy, was evaluating the best way to move forward with an innovative customer value-based pricing approach for its enterprise software solutions. Trilogy had radically transformed its business from a product-centric organization to a customer-centric organization, and value-based pricing was a pillar of this transformation. Meyer had to evaluate three pricing approaches: traditional license-based, subscription-based, and gain-sharing. He had to assess which pricing approach Trilogy and Trilogy’s clients would prefer, and the conditions under which gain-sharing pricing would work. He also had to address several adoption barriers that were preventing customers from embracing the gain-sharing pricing approach.

Number of Pages: 22

Extended Case Information

Teaching Areas: Marketing, Technology

Geographic: USA, Texas

Industry: Software

Organization Name: Trilogy Corporation

Organization Department: Marketing

Organization Size: Medium

Decision Maker Position: Chief Marketing Office

Decision Maker Gender: Male

Year of Case: 2003