Value-Based Pricing: Lessons from Tesla on Monetizing Innovation

October 6, 2016 Valerie Howard

Last week Elon Musk sent a memo to all of his employees stating, “If you can’t explain to a customer who paid full price why another customer didn’t without being embarrassed, then it is not right.”

That statement reflects both Tesla’s commitment to the customer experience and its confidence in value-based pricing for its unique products. According to Musk, Tesla has a no negotiation and no discount policy – a refreshing perspective to the stereotypical car dealership experience where haggling over price and details can be a consumer’s worst nightmare.

Granted, pricing is less complicated for a B2C company that has low-volume deals from a small product catalog than it is for the average B2B technology vendor offering complex SKUs to a market where seemingly no two customers are alike.

Still, wouldn’t you love to have so much confidence in your pricing that you could explain one customer’s price to another? So much confidence that you could remove the negotiation process altogether from the majority of your transactions?

From competition to short product lifecycles to outdated processes, there’s a lot that gets in the way of maximizing the revenue potential of your latest innovations. In an uncertain economic environment, it’s more important than ever that technology vendors pay attention to pricing inefficiencies that are slowing down growth and hindering the customer experience. Want to learn more about our approach to extending innovation to the sales process in high tech? Visit us at to find additional technology industry resources or schedule a demo 

About the Author

Valerie Howard

Valerie Howard, Solution Strategy Director at PROS, manages the go-to-market strategy for the PROS pricing solution portfolio. As a former pricing leader and PROS user, she has firsthand experience in the transformative benefits and competitive advantages that can be realized through leveraging AI for pricing. Valerie earned an MBA from the McCombs School of Business at The University of Texas and a B.S. in Electrical Engineering through a scholarship at the Cooper Union for the Advancement of Science and Art.

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