Lifetime Pricing

Description

Set prices based on the lifetime cost of ownership and value created. Include cost of failure, where failure includes not only repair cost but other factors such as cost of lost business as a result of the failure. Other factors include costs for training, upgrade, disposal costs, etc.

Price such that a sales person might persuade a customer to buy by demonstrating that the lifetime cost of ownership is much lower than that of competing products.

Discussion

Lifetime pricing is generally used to justify higher prices, though lifetime consideration may lead to pricing at a low point, for example with disposable goods.

When people buy things they often do not consider what further costs they may meet in the future. Cheap products can seem to be good value, yet if they break easily or do not offer adequate functionality, then they can turn out to be rather poor value.

When you use lifetime pricing, you may have to put extra effort into selling, with adverts that promote the lifetime value and personal, one-to-one selling.

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Lifetime Pricing

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Site Menu

Quick links

Disciplines

Techniques

Principles

Explanations

Theories

And