Understanding Value-based Pricing for Industrial Internet of Things

Digital industrial platforms are increasingly implemented as an inter-organizational digital infrastructure to unlock numerous sources of value. Establishing an appropriate pricing strategy is pivotal for platform providers’ success. To profit from these value sources, existing research considers value-based pricing as a superior and customer-oriented pricing strategy, enabling platform organizations to capitalize on the technological platform integration in the manufacturing domain. However, little is known about value-based pricing in the Industrial Internet of Things (IIoT) and how platform organizations understand and establish it. To advance the understanding of value-based pricing at the nexus of IIoT and digital platforms, we report on a qualitative study spanning 19 interviews with digital industrial platform providers. Our preliminary findings incorporate core characteristics, preconditions, outcomes, challenges, and guiding principles experienced by the experts, connecting the fragmented research streams on value-based pricing and digital platforms in IIoT and supporting platform organizations in crafting financially sustainable business models.