How to turn pricing from an annual exercise into a repeatable commercial advantage.

As cost inflation stabilizes in many B2B markets, the “easy” rationale for price increases is fading. What’s replacing it is harder, but more sustainable: data-backed pricing and a credible value story that frontline teams can defend.

A global B2B commercial survey (n≈1,263) found that 55% of companies were able to match or exceed input cost hikes with price increases, but the biggest barrier to margin-enhancing pricing was competitive pressure and customer resistance (67%), followed by insufficient data/analytics (39%) and pricing capability gaps (37%).

The implication is straightforward: the next margin gains won’t come from “raising list.” They will come from raising realized price – systematically, segment by segment.

Why pricing is still the fastest margin lever

Pricing remains disproportionately powerful because it drops through the income statement faster than most operational initiatives – provided volumes hold.

One widely cited analysis of large public companies showed that a 1% price increase (with stable volume) can drive roughly an 8% increase in operating profit, outpacing equivalent improvements in cost or volume.

That leverage is why “pricing excellence” is less about debating percentages and more about building a capability: know where you have pricing power, capture it consistently, and defend it with value.

The confidence gap: why some firms gain margin while others stall

In that same B2B survey, companies confident they could push price increases through in 2025 showed an expected ~3 percentage-point profit margin premium versus peers.
And the reported margin-performance gap between “confident” and “not confident” firms ranged from 5 to 11 percentage points.

What explains the gap is not “bravery.” It’s typically three structural differences:

  1. Better price intelligence (market and competitor visibility + customer segmentation)
  2. Better price execution (controls that protect pocket price)
  3. Better value communication (frontline capability to defend the premium)

The Intelligent Pricing System: four capabilities that compound

High-performing pricing organizations increasingly run an “intelligent pricing system” that connects strategy to day-to-day execution.

1) Market sensing that’s usable – not just informative

Pricing teams often collect competitive data, but fail to translate it into actions. Intelligent pricing turns sensing into decisions:

  • competitor benchmark signals by product corridor
  • early-warning triggers for volatility
  • scenario rules (what changes when input costs, FX, or tariffs move)

2) Segmentation that reflects willingness-to-pay (not just industry codes)

The goal isn’t micro-pricing everything; it’s to separate where you can:

  • defend price (high differentiation / switching costs)
  • trade value for volume (high substitutability)
  • selectively invest to gain share (competitor constraints)

The same survey found companies are heavily investing in AI-enabled pricing intelligence, especially tools that support competitor benchmarks and customer segmentation for tailored prices/discounts.

3) Deal guidance and discount guardrails that protect “pocket price”

Most margin leakage happens after list price – through:

  • discretionary discounting
  • ungoverned concessions
  • inconsistent rebate structures
  • negotiated terms that quietly erode realized price

In practice, intelligent pricing provides:

  • account-specific guidance ranges
  • escalation rules for exceptions
  • reason codes tied to measurable “give-get”
  • a consistent view of price waterfall and pocket price

4) A value story the field can actually sell

When inflation fades, customers ask the question they avoided last year: “Why is this worth more?”

In the same survey, 52% of companies expecting to raise prices said they planned more frontline training so sellers can articulate a distinctive value proposition that supports a premium.

This is the underappreciated point: pricing power is often a communication capability as much as an analytics capability.

The most common failure mode: investing in AI but under-investing in adoption

Many organizations buy pricing tools and still see weak impact because:

  • guidance isn’t embedded in daily workflows (CRM/CPQ/quoting routines)
  • governance is unclear (who can override, when, and why)
  • sellers don’t trust the “why,” so they discount preemptively

Survey evidence suggests organizations using data-driven guidance are more confident in negotiations and can win more deals; one referenced finding reported a ~12% higher win rate versus peers without such guidance.

The pattern is consistent: technology accelerates what the operating model can absorb. If decision rights and frontline routines aren’t redesigned, tool impact stays local and fragile.

A practical 10–12 week roadmap (built for measurable margin)

Weeks 1–2: Diagnose margin leakage

  • pocket-price decomposition (list → net → pocket)
  • discount variability by segment and rep
  • top 20 “leakage drivers” (terms, rebates, freight, penalties, overrides)

Weeks 3–6: Build the minimum viable pricing engine

  • segmentation rules + pricing posture by segment
  • competitor benchmarks for the highest-value corridors
  • deal guidance bands + exception workflow

Weeks 7–10: Equip the field with a defendable value story

  • “value proof points” library by segment (ROI, outcomes, risk reduction)
  • negotiation talk tracks + objection handling
  • manager coaching routines (how to hold the line without losing the deal)

Weeks 11–12: Install governance and measurement

  • weekly margin bridge (price vs mix vs cost vs leakage)
  • guardrail compliance reporting (exceptions, overrides, dispersion)
  • continuous learning loop (what worked, where, and why)

Leadership questions that reveal readiness

  1. Do we manage realized price (pocket price), or do we mostly manage list price?
  2. Where do we consistently win premiums, and what proof points explain it?
  3. Are discounts governed by a clear “give-get,” or negotiated deal by deal?
  4. Can a salesperson explain our price in one minute – credibly – without “inflation” as the reason?
  5. Is pricing guidance embedded into workflows – and do managers coach to it?

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