Why Asking Your Pricing Leader “What Is Our Pricing Strategy” Is a Really Stupid...

The Misconception About Pricing Strategy

Executives often ask their pricing leaders, "What is our pricing strategy?" expecting a straightforward answer. But this question is fundamentally flawed. Pricing depends on many cross-functional leaders to know and be able to articulate their strategies to be able to structure a pricing strategy.  Think of it this way, how can a pricing professional create a strategy if no one can tell them who the competitors are on any specific product, which customers value that product the most, and why? 

Ultimately, pricing does not set strategy—pricing structurally supports all the other strategies in the company. 

To be frank, it is surprising how few leaders understand this and do this well. The real question executives should be asking is: Do we have the right structural foundation to support our overall business strategy through pricing? That means understanding where pricing fits into the bigger picture, and ensuring every function aligns to create a cohesive pricing structure that enables success.

Pricing Doesn't Set Strategy—It Supports It

The CEO's Role: Defining Market Positioning

Pricing should reflect the company's price-value positioning, which is ultimately the CEO’s responsibility. Are you a cost leader, a premium provider, or somewhere in between? Where are you now, where are you going?  How strong of a conviction do you have on this? Without clarity from leadership, pricing leaders are left working in a vacuum.  It’s a big ask, but frankly, without executive clarity on the big picture, the success of a pricing team is quite limited.

Template for CEOs:

Product Management’s Role: Supporting the Strategy with Lifecycle & Competitive Positioning

Product managers determine how the product or service portfolio evolves to support pricing strategy. Without structured Product Lifecycle Management (PLM) and competitive analysis, pricing leaders are forced to work reactively rather than proactively.  Strategic pricing doesn’t exist without strong product management.

Template for Product Management:

Sales Leadership’s Role: Defining Customer Segmentation & Value-Add Strategies

Sales leadership determines which customer segments will drive growth and what value-add services justify premium pricing. Without this information, pricing teams cannot build effective segmentation or discounting structures.  Ultimately if sales leaders can’t document these specifics, the tendency is to assume every customer is price-sensitive and equally important both internally and externally.

Template for Sales Leadership:

Operations’ Role: Identifying Cost Drivers in Order Processing

Operational constraints massively impact pricing effectiveness. For example, certain order environments (rush orders, complex customizations) drive up costs, yet many companies fail to document these implications.

Template for Operations:

The Hidden Work of Pricing Leaders

Because most companies don’t do this well, pricing leaders end up having to push other functions to document these strategies. They piece together fragmented insights across departments to create a pricing structure that may work but is probably suboptimal.

And the worst part? They rarely get credit for it.

A Challenge for Executives: Align Your Functions

If you’re an executive reading this, here’s the challenge: Go to your pricing leader and ask, “What information do you need from me, sales, product, and operations to build a better pricing structure?”

Then use these templates to document your strategic inputs and give pricing leaders the foundation they need to do their job. When pricing supports strategy rather than being expected to define it, the whole organization benefits. 

Final Thought: Instead of putting pricing in a silo, structure your pricing foundation correctly by ensuring every department contributes. Your pricing leader isn’t there to tell you the strategy—they're there to make sure the strategy of the rest of the team works.  Occasionally an insightful pricing professional is effective at getting other functions to get clarity and communicate their strategy over a series of internal conversations and battles, but it’s way more effective and efficient for leadership to simply ask everyone to do their part.