service based pricing

A pricing system which is based in part upon revenue sharing between the service provider and client, incentives for cost savings and/or early delivery, or tiered pricing determined by which service components are chosen as part of the product package. The basis for service based pricing depends upon the type of industry or product. For example, an advertising agency charges a lower amount for an advertising campaign based upon a percentage of revenue generated as a result of the advertising. Also called performance based pricing.