Do you have a pricing strategy? Here's what it should contain
Many companies say they have a pricing strategy. Fewer actually do. Even fewer have one that is written down, consistently applied, and understood across the business. Yet in a world of rising costs, complex portfolios, and value-driven selling, pricing without a clear strategy is like sailing without a compass.
This is article 2 in our series Pricing Insights, where we explore practical frameworks to build profitable, value-based pricing in B2B.
Why a pricing strategy matters
Your pricing strategy is more than a number. It's the link between your business model, your customers' willingness to pay, and the value your offering delivers. Without it, pricing becomes reactive, political, inconsistent, or worse: neglected.
A strong pricing strategy gives alignment across sales, finance, and marketing. It creates rules for pricing new deals or adjusting existing ones. It equips the company to respond to cost changes, market shifts, and customer demands. It also sets a path to margin growth and portfolio harmonization.
When everyone understands how and why prices are set, confidence increases – both internally and externally. Customers get consistent messaging. Sales teams know the rules. Finance can forecast more accurately. Leadership can trust the margins. And in investor discussions, having a coherent pricing strategy strengthens your narrative.
The science behind it
McKinsey & Company consistently shows that structured pricing strategies deliver significantly higher EBITDA margins than reactive approaches. Harvard Business Review reports that companies with documented pricing policies outperform their peers in profit realization and customer retention.
Simon-Kucher & Partners highlight that businesses with clear pricing governance see stronger sales effectiveness, lower discount variance, and more resilient customer portfolios. Pricing clarity reduces internal conflict and external confusion.
What your pricing strategy should include
1. Objectives
Define what pricing should achieve – whether it's margin expansion, market share, predictability, simplicity, or premium positioning. A pricing strategy without goals is just a guess. Link pricing objectives to business priorities and revise them as markets evolve.
2. Segmentation logic
Identify how customers differ in value perception, cost to serve, and price sensitivity. Good segmentation enables differentiated pricing. Go beyond size or industry – look at usage patterns, needs, and strategic importance. For example, customers requiring extensive onboarding or compliance support may justify premium pricing.
3. Value proposition by segment
Clarify what each customer group values most and connect pricing to those drivers. Segment A may care about uptime; Segment B might value integration speed. Let the model reflect these preferences in both pricing and communication.
4. Pricing models and architecture
Specify if you use flat fees, tiered packages, usage-based pricing, or value-based formulas. Define when and where each model applies. Simplicity matters, but so does alignment to your offering. For instance, a fixed fee may suit a legacy service, while a newer SaaS offering could benefit from tiered, usage-sensitive pricing.
5. Discount governance
Establish who can approve what discounts under which conditions. Treat discounting like inventory – tracked, justified, and cleaned regularly. A clear framework helps sales focus on value, not giveaways. Consider auto-expiring discounts or time-bound incentives instead of permanent reductions.
6. Indexation and review process
State how and when prices are reviewed – yearly, indexed, or based on market changes. Make reviews systematic. If contracts include indexation, enforce it. If not, consider adding it. Transparency here improves internal consistency and external trust. Annual review rituals reinforce discipline.
7. Communication guidelines
Train customer-facing teams in price logic and messaging. Provide talk tracks and materials. Remove ambiguity. Clear internal understanding improves external outcomes. Pricing narratives should reflect customer impact, not internal cost logic.
8. KPIs and monitoring
Track price realization, discount leakage, and compliance. Use dashboards to highlight patterns. Metrics drive awareness – and action. When pricing is measured, it is managed. Consider showing deal-level margin trends or ranking discount usage by team.
9. Sign-off and accountability
Ensure pricing strategy has senior-level approval and clear ownership. Teams need to know where to turn for questions or guidance. A named pricing lead, supported by a cross-functional group, drives accountability. Communicate ownership clearly in the strategy document itself.
10. Annual governance
Make pricing a fixed topic in your strategic forums – such as Product Council or commercial reviews. Revisit the strategy at least once per year to maintain relevance. August is an ideal time to communicate pricing plans internally, so sales teams can raise it with customers during autumn budget season. This annual rhythm ensures readiness and alignment.
Common pitfalls to avoid
Confusing pricing strategy with a price list.
Letting the strategy go stale.
Leaving it to sales alone.
Making it too complex to use.
Copying competitors instead of pricing for your value.
Pricing in practice
A mid-sized software firm implemented a clear pricing strategy with segmentation and structured discounts. Within 12 months, they halved discounting (from 18% to 9%), increased average deal size by 12%, and raised margins by 3 points. Sales adoption improved with a one-page visual guide to approval logic.
Another B2B SaaS company mapped price realization and spotted large inconsistencies across markets. A rule requiring VP sign-off for discounts over 10% helped cut underpriced deals significantly.
In a third example, a logistics platform rewrote their pricing structure to better reflect how customers used their service. They replaced legacy flat fees with usage bands and tiered feature access. Customers perceived it as fairer – and the company grew ARPU by 16% in one year.
Applies to all companies – big or small
While large enterprises may assign full-time roles to pricing, the principles apply equally to smaller or mid-sized companies. Even with fewer products or customers, pricing deserves ongoing attention. Designate someone to take ownership, revisit the strategy annually, and embed pricing logic into key workflows. A well-tended strategy creates margin resilience and removes the guesswork in commercial decisions. In fact, for companies with lean teams, a clear pricing strategy can be the most scalable way to protect profitability.
Tips for getting started
Don’t overcomplicate. A basic, 3-page strategy beats none. Involve sales early. Use real customer insights. Refresh the strategy yearly. Publish it internally. Make it visible and operational – not buried in a file. Consider running a pricing workshop with product, sales, finance, and leadership to align goals and terminology.
Final word: pricing is a capability, not a project
A pricing strategy isn’t theory. It’s practice. It’s about building alignment, consistency, and value confidence across your teams. When everyone knows how pricing works – and why – it becomes one of your strongest commercial levers.
Author: "Mr Pricing", Tobias Murray, CEO and Co-founder at VAERG vaerg.com
About the author. Tobias Murray helps B2B companies turn pricing into a scalable growth engine. With long-standing experience across industries, he specializes in structured, data-driven pricing strategies that consistently deliver 10–25% EBITDA uplift. As CEO of VAERG, he and his team transform fragmented pricing into a systematic, value-generating discipline.