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:
- Better price intelligence (market and competitor visibility + customer segmentation)
- Better price execution (controls that protect pocket price)
- 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
- Do we manage realized price (pocket price), or do we mostly manage list price?
- Where do we consistently win premiums, and what proof points explain it?
- Are discounts governed by a clear “give-get,” or negotiated deal by deal?
- Can a salesperson explain our price in one minute – credibly – without “inflation” as the reason?
- Is pricing guidance embedded into workflows – and do managers coach to it?
