Contract drilling margins were 20 percent reflecting the transition from turnkey to cost-plus pricing for new drilling programs.

The "secret sauce" they write can be found in creating powerful feedback loops between customer groups - developers, customers and even advertisers - and dismantling traditional cost-plus pricing models in favor of those that subsidize one side so that profits can be made from the other.

Competing parts suppliers, customer demands and internal pressures to increase profits are fueling the need for companies to switch from their over-used, cost-plus pricing tactics, where service parts prices are derived from a standard percentage mark-up from purchase price, to optimized service parts pricing, where market information and price elasticity help determine optimal selling prices to maximize gross profit.