Pricing: The Overlooked Pillar of Business Strategy
When most business leaders think about their core functions, the usual suspects come up: Sales, Marketing, Operations, Finance, maybe even Supply Chain or HR depending on the organization. These are the pillars. They’re represented in org charts, they’re discussed in board meetings, and they have clear budget lines and leadership roles.
Pricing, on the other hand, is almost always considered a lever—not a pillar. A tactical tool to be adjusted when sales are down or competition heats up. A spreadsheet owned by someone in Finance or Sales Ops. An afterthought.
This perception is more common than we’d like to admit—and it might be the biggest reason why so many businesses are leaving money on the table.
A Brief Look at How We Got Here
Historically, pricing wasn’t a strategic discipline. In manufacturing-led B2B businesses, prices were often cost-plus: take your cost, add a margin, and you’re done. Pricing was reactive, handled case-by-case by sales reps or manually adjusted during the budgeting cycle.
As companies grew, other functions evolved. Sales became more specialized. Marketing adopted segmentation and automation. Finance implemented sophisticated planning systems. But pricing didn’t evolve at the same pace, especially in mid-sized B2B companies where dedicated pricing teams were seen as a luxury, not a necessity.
Even now, I’ve worked with companies where:
List prices haven’t been reviewed in years.
Discounts are granted based on who’s asking, not what’s justified.
There’s no clear owner of pricing strategy.
The Strategic Cost of Treating Pricing Tactically
When pricing is seen as a lever, it’s pulled reactively—often in response to competitive pressure or sales goals. But pricing isn’t just a number on a quote or invoice. It’s a message to the market. It signals value. It shapes perception. And it has a direct, disproportionate impact on profitability.
A 1% improvement in price can lead to an 8–12% improvement in operating profit, according to a classic McKinsey study.¹ No other lever offers that kind of return.
Yet pricing still gets sidelined in favor of louder or more familiar functions.
Why This Needs to Change
Over the last decade as a pricing professional, I’ve seen firsthand how pricing can evolve from an afterthought to a strategic pillar. In some cases, just bringing transparency to discounting patterns led to millions in recovered margin. In others, aligning pricing more closely with customer value helped accelerate profitable growth in stagnant markets.
But these shifts only happen when pricing is given a seat at the table—when leadership sees it not as a lever to pull, but as a discipline to build.
Where We're Headed in This Series
Over the next few months, I’ll try to unpack the real challenges and untapped opportunities in pricing, especially for mid-scale B2B companies. We’ll talk about why sales and pricing are often at odds, how to introduce a pricing structure without slowing your business down, and what good pricing governance actually looks like.
My goal is to help business leaders see pricing not as a line item—but as a growth engine.
If you’ve ever felt like your pricing process is more gut feel than strategy, or if you’re trying to figure out how to make it work across teams—this series is for you.
References
McKinsey & Company. The Power of Pricing. https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-insights/the-power-of-pricing
