The Pricing Lifecycle and Why Every Organization Should Embrace It

By Barrett Thompson, VP Customer and Industry Relations at Zilliant

Pricing is often an afterthought in the manufacturing and distribution industries. The most common misconception is that pricing is a singular concept operating in isolation. This oversimplification fails to recognize effective pricing is interconnected in nature and impacts brand, financials, buying, and selling. In short, pricing has never been more important to the business.

For many B2B businesses, pricing is fractured across multiple CRMs, ERPs, spreadsheets, and other systems. Companies lack a single source of pricing truth and often rely on cumbersome spreadsheets to manage pricing. This manual approach can lead to significant challenges for businesses as they seek to invest in digital transformation. Key indicators of a broken pricing lifecycle include long deal cycles, inconsistent pricing, missed upsell opportunities and an inability to offer personalized experiences. Companies may also struggle with over-discounting, high levels of inventory waste and slow reactions to market changes. 

The pricing lifecycle

The pricing lifecycle is an interconnected process that determines how a company gets the right deal, at the right price, to the customer at the right time. It consists of six major steps:

• Strategize: Establish revenue growth and margin requirements and align those to meet corporate objectives or goals. This will shape your future pricing strategy.
• Manage: Create a source of truth for your pricing strategy and manage the drivers of price, cost or customer-specific pricing. This includes making price adjustments based on cost changes, regional factors, discounts, business rules, etc.
• Optimize: Determine the best pricing model based on market inputs and your pricing strategy. Then, with the help of technology, prices can be quickly adapted as needed based on market changes.
• Influence: With targeted guidance, empower sales to identify opportunities and incentivize purchasing or selling behavior to close deals faster.
• Deliver: Enable customers, sales and partners to close the right deal at the right price and through the right channel.
• Analyze: Measure, learn and improve the impact and execution of pricing strategy through insights.

The key to managing a successful pricing lifecycle is ensuring that data and insights from each stage build and feed into the next. While the pricing lifecycle is crucial for business success, many organizations struggle to implement it effectively.

Why is it hard for businesses to recognize the lifecycle?

In today’s volatile markets, agile pricing strategies have become critical, and the era of annual “pricing update seasons” is long gone. Today’s businesses make thousands of pricing updates quarterly and adjust thousands of SKUs daily to match ever-changing market dynamics. The ability to swiftly adjust prices in response to market shifts, supply chain disruptions or demand fluctuations is now a key differentiator. 

However, many organizations struggle to keep up with price changes due to a reluctance to alter the status quo, even when change is clearly necessary, or even find themselves ill-equipped to implement rapid changes while maintaining strategic focus. This often results in pricing becoming deprioritized or even ignored, which is problematic as pricing touches so many departments, such as sales, marketing, product, and finance. This gap between the need for agility and the capability to execute underscores the importance of developing a robust, integrated pricing lifecycle that properly aligns people, process, and technology across the company. Technology alone cannot fully connect the essential parts of the pricing lifecycle. 

Nobody owns pricing, and everyone owns pricing

The pricing lifecycle is bigger than just pricing decisions. Because pricing is so central to a customer’s experience, it can’t afford to be siloed across spreadsheets or disparate systems. In that sense, no single person or department owns pricing—everyone owns their unique contribution to the pricing lifecycle. Done well, companies can reduce manual bottlenecks and deliver the right deal at the right price to the customer.

Making a pricing decision depends on what you want your prices to do for you. This is where investing in the right tools and technology can make a difference in helping businesses achieve their revenue and profit goals. Companies that invest in the correct tools are able to fully execute the pricing lifecycle in a seamless way, ensuring that data and insights are at the forefront of decision-making. Only through efficient management of the entire pricing lifecycle will companies be able to ensure future-proof pricing and drive profitable growth.

For companies to truly get the most out of pricing, they must look at it as a tightly connected process spread across multiple departments and as a strategic lever for growth and profitability. When all departments are aligned, B2B companies can unlock new revenue streams, improve profitability, and build lasting customer relationships by fully embracing the pricing lifecycle.

About Barrett Thompson:

Barrett is the VP Customer and Industry Relations at Zilliant, where he aims to enable B2B companies to achieve higher performance in a more scalable way through applied decision models. He has been at the company for nearly 20 years and works with manufacturers and distributors, tackling the challenges of margin and revenue growth. Barrett has over 25 years of experience helping Fortune 500 companies improve their profitability and grow their revenues, including Revenue Technologies, Manugistics Inc., and AtWork Technologies, where he worked prior to Zilliant.