ABSTRACT
Pricing professionals frequently use the term "willingness-to-pay" (WTP) to discuss the spending limit of customers for products they buy. The concept holds promise for business-to-business (B2B) manufacturers and distributors when trying to estimate the right price for each of their products and markets. Businesses that customize have a spot pricing model as requirements and product configurations are ever changing. A large number of B2B customers have an agreement or contract-pricing model. Special pricing agreements (SPAs) are set up because customers want special treatment beyond a standard price. Almost every company has some form of promotional pricing or rebate programs. Surveys can be a useful tool in B2B, but they are less useful in estimating elasticities for most of the pricing models outlined. All the B2B pricing models, except for list/matrix pricing, employ a sales force, pricing desk or price negotiators. The key to unlocking WTP can be found in applying the science of pricing to someone's market data.
