Customer Acceptance of Usage Behavior-Based Prices

Usage behavior-based pricing is a frequently discussed innovative approach in designing more efficient value propositions for services of which the operating cost heavily depends on customer behavior. Although it is beneficial for most market participants, providers are still holding off, worrying about customer acceptance. This paper presents a novel approach in explaining customer acceptance, capturing prior knowledge on how price model design influences customer choice. with an empirical study, we prove that customer support of the design of the price model is even more decisive than value for money. We identify four effects that influence customer evaluation: Price coupling, price ambiguity, smart shopping and self-commitment. Based on our results, better value propositions can be developed to foster the success of usage behavior-based prices.