ERP and supply-chain application vendors increasingly are pitching new pricing schemes that base license fees on a buyer's revenue, total employee head count or even the financial return expected from using the software.

But the reaction of software buyers has been decidedly mixed. So-called value-based pricing often requires companies to kick in extra payments if their revenue — or number of employees, in the case of human resources applications — surpasses negotiated levels.

What exactly is yield management? Essentially, it's value-based pricing. A product's worth generally varies among different groups of people—business travelers versus vacation travelers, avid baseball fans versus those just looking for something to do on a Tuesday night. By characterizing a group whose members value a product similarly, but differently from other groups, a company can generally establish pricing mechanisms tailored to each customer group's values.

What is the rationale for our pricing strategy? The pricing of services is a nebulous area. Cost-based pricing is often difficult to determine, and there are few formulas for effective value-based pricing.