The transformation economy, where businesses guide customers to achieve their aspirations and get paid upon their success, is explored. B. Joseph Pine II, co-founder of Strategic Horizons, explains that commoditization drives the shift from products and services to experiences and, ultimately, transformations. Companies can facilitate transformations in health, wealth, knowledge, and purpose by understanding customers' core aspirations through methods like the "five whys." Medtronic's move towards outcome-based pricing and Texas State Technical University's funding model based on graduate employment rates exemplify this shift. While acknowledging risks, Pine advocates for pricing models that charge for demonstrated outcomes, such as transformation guarantees and success fees, to foster commitment and align business goals with customer success.
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