Vendors and partners are embracing outcome-based value and pricing, but defining results, measuring success, and assigning risk make the model far harder to execute than the rhetoric suggests.

Customers don’t buy products; they purchase systems — collections of different products and services that create value greater than the sum of their parts. In other words, customers increasingly seek outcomes more than anything else. And that’s why many vendors are looking to evolve toward outcome-based value propositions and pricing.

But what exactly is an outcome? How can and should vendors price based on outcomes? And what does outcome-based value and pricing mean for partners and customers?

At the annual Genesys Xperience conference in Las Vegas this week, CEO Tony Bates clearly articulated the need to move toward outcome-based value propositions and pricing. However, he also cautioned against thinking of outcomes as a universal model with a common result. In his estimation, outcomes are contextual and will change from engagement to engagement, much less from customer to customer.

The complication is that outcomes also introduce a new level of risk. If customers are paying for results rather than simply products or services, vendors and partners must determine how success is measured, who gets rewarded when expectations are exceeded, and who absorbs the cost when the promised outcome falls short. That makes outcome-based pricing as much an economic and operational challenge as a sales proposition.

It turns out that outcome-based value propositions and pricing sound great as buzzwords but are much harder to define and translate from concept to deliverable to pricing model.

In this episode of “In the Margins,” Channelnomics CEO Larry Walsh checks in from Las Vegas to delve into the topic and explain why outcomes may be the future — but may also vex channel leaders for the foreseeable future.