The 5 Types of Pricing Teams

Pricing represents perhaps the most critical component of your customer relationships. Yet numerous distributors treat pricing as secondary. Pricing affects brand perception, profitability, wallet share, and competitive standing. Which team member manages your pricing approach?

Our work identified five predominant pricing models:

Pricing Team 1: No One in Charge

Some organizations apply cost-plus formulas or list-based pricing without strategic consideration. Random discounts flow to favored customers. The assumption that all customers value price similarly proves incorrect. Customer price sensitivity varies based on product usage, their own market demands, relationship history, and other factors. Neglecting these differences means leaving profit unrealized.

Pricing Team 2: The Owner on the Weekend

Experienced leaders may believe their market intuition suffices for pricing decisions. However, continuous market shifts outpace individual judgment. Competitors employing data-driven tools capture share. Some owners attempt spreadsheet analysis during nights and weekends, exhausting themselves without adequate impact. Without proper tools, decision-making consumes excessive time while arriving too late for meaningful effect.

Pricing Team 3: 100 Different Sales Reps… 100 Different Price Managers

When salespeople make independent pricing decisions, profit erodes rapidly. Sales representatives positioned closest to customers and competitors seem logical price-setters. Yet allowing data-free overrides typically results in lower margins for easier sales completion. This reflects normal human behavior, not incompetence. Common scenarios involve reps matching competitor discounts without verification or accepting internal pricing precedents without questioning them. Permitting individual override authority essentially abandons pricing strategy and profitability control.

Pricing Team 4: An Out-of-Touch Consulting-Dependent Organization

Outside pricing consultants require dependency and employ simplistic, cost-efficient methodologies. Their proprietary "black box" approaches obscure basic techniques. Clients discovering these simple methodologies realize they could manage independently, eliminating the consultant's value. Outsourced services provide limited benefit beyond initial wins. Effective pricing demands proper customer segmentation and market knowledge that external advisors cannot possess. Why delegate your most important profit driver externally?

Pricing Team 5: A World-Class Team of Professionals

Data analysis accelerates profit generation. This approach requires developing optimal strategy, implementing effective processes, measuring outcomes, and aligning technology. Leadership should come from internal teams applying customer, product, and market knowledge. epaCUBE provides industry-leading optimization software alongside distribution pricing expertise, delivering dual advantages: maintaining control through user-friendly tools while accessing professional guidance, best practices, and profit strategies without hidden methodologies or guesswork.