prestandapriser

Prestandapriser is a pricing concept used in Danish markets to link the price of a product or service to its measured performance. In a prestandapriser model, the total price consists of a base amount plus adjustments based on how well the offering meets predefined performance targets. The approach aims to align costs with delivered value rather than paying a fixed price regardless of outcomes.

Pricing agreements define the performance metrics, targets, and the method for measuring and verifying results. Common indicators include efficiency, uptime or availability, throughput, accuracy, latency, defect rate, or customer-satisfaction measures. Measurements are typically covered by service-level agreements or contract annexes and may require third-party verification or audited data.

Applications of prestandapriser span procurement, IT and cloud services, manufacturing, energy efficiency programs, and professional services. For example, a software contract might combine a base license fee with adjustments tied to system availability, while a cloud service could adjust price based on compute performance relative to a target benchmark.

Benefits of this model include better value for money, risk-sharing between buyer and seller, and incentives to improve performance. Drawbacks include the complexity and cost of defining appropriate metrics, potential incentives to manipulate measurements, and the need for transparent data collection and verification processes.

See also: performance-based contracting, value-based pricing, service-level agreement, outcome-based pricing.