What pricing approach involves assessing customer savings against their payments?

The correct answer is value in use pricing, which focuses on the perceived value that a product or service provides to the customer in relation to their experience and savings. This approach assesses how much value a customer derives during the usage of a product, particularly in terms of cost savings or benefits that exceed their monetary payment.

For example, in industries where a product substantially reduces costs or improves efficiency, the pricing can be based on the quantifiable benefits that a customer experiences over time. This strategy encourages businesses to highlight the effectiveness and total cost of ownership of their products rather than just the initial purchase price.

This method contrasts with other pricing approaches, such as markup pricing, which is based on adding a percentage to the cost of production, and value pricing, which precedes may alignment with competitors’ strategies while aiming to position a product based on its perceived value per customer. Cost-driven pricing, on the other hand, focuses strictly on production costs without considering the additional value perceived by the customer. Each of these other methods lacks the emphasis on the actual savings realized by the customer in their use of the product, which is the hallmark of value in use pricing.