Why Progressive Pricing Is Becoming a Competitive Necessity

Economic tradition posits a single, undifferentiated price for all who buy a product or service. Now “progressive pricing” is challenging that tradition. Progressive pricing increases or decreases according to the value a customer gleans from the offering. Customers knowingly pay for a certain “level of value.” Soon, firms won’t have a choice in whether to adopt progressive pricing. The provider–consumer relationship is evolving toward measuring “discrete customer value,” making progressive pricing inevitable. Moreover, firms today can innovate at no marginal cost. Instead of upgrading physical products, they create...