Don’t Let it Be an Orphan: Who Should Own Pricing?

Pricing is one of the most powerful levers for profitability, yet in many organisations, it lacks clear ownership. Instead of being treated as a core strategic function, pricing is often passed between departments—finance, sales, marketing, or product—with no one truly taking responsibility. This fragmented approach can lead to inefficiencies, inconsistent strategies, and ultimately, lost revenue.

In this article, we explore why pricing often becomes an organisational orphan, the consequences of unclear ownership, and how businesses can establish structured and effective pricing ownership to unlock its full potential.

The Problem: Pricing Without a Home

Pricing decisions are inherently cross-functional. They involve inputs from multiple departments:

• Finance provides cost data and ensures profitability.
• Marketing defines customer segmentation and value propositions.
• Sales interacts directly with customers and negotiates pricing.
• Product teams focus on feature sets and development costs.
• Executive leadership aligns pricing with overall business strategy.

While these perspectives enrich pricing decisions, they can also lead to blurred accountability. Without a designated owner, pricing becomes reactive, with decisions driven by internal conflicts, gut feelings, or short-term pressures rather than a coherent strategy.

The Consequences of Fragmented Ownership

1. Inconsistent Pricing Policies
   When multiple departments influence pricing without coordination, the result is often a patchwork of policies that confuse customers and undermine value perception.
2. Overreliance on Cost-Plus Models
   Pricing decisions led by finance tend to default to cost-plus strategies, which fail to capture the value customers are willing to pay. This approach often leaves money on the table.
3. Discount Culture
   Sales teams, under pressure to close deals, may default to discounting, eroding margins and devaluing products in the eyes of customers.
4. Missed Strategic Opportunities
   Without a holistic view, pricing fails to align with broader business objectives, such as entering new markets, launching premium products, or driving customer loyalty.
5. Internal Friction
   Departments may clash over pricing decisions, delaying implementation and weakening the organisation’s ability to respond to market dynamics.

Who Should Own Pricing?

Pricing ownership depends on the organisation’s sise, structure, and strategic priorities. Here are common ownership models and their pros and cons:

1. Finance-Led Pricing

Finance departments often oversee pricing in cost-focused organisations. While they excel at ensuring profitability, their approach may overlook market dynamics and customer value.
Example: A retailer relying on finance-led pricing may miss opportunities to charge premiums during peak demand due to an overemphasis on cost control.

2. Marketing-Led Pricing

Marketing teams bring customer insights and competitive analysis to pricing decisions. However, they may prioritise market share over profitability, leading to undervalued pricing strategies.
Example: A SaaS company with marketing-led pricing might offer aggressive discounts to capture new customers, risking long-term margin erosion.

3. Sales-Led Pricing

Sales teams often demand pricing flexibility to close deals. While their customer proximity is valuable, unchecked sales-led pricing can lead to inconsistent strategies and an overemphasis on discounts.
Example: A B2B firm might lose margin discipline if sales teams are allowed to negotiate discounts without oversight.

4. Product-Led Pricing

Product teams align pricing with features and innovation but may lack market insights or customer focus. This can result in overengineered products priced out of reach for target audiences.
Example: A tech company might overprice new features, alienating customers who don’t perceive sufficient value.

5. Strategy Office or Pricing Team Ownership

A centralised pricing team or strategy office brings expertise, cross-functional collaboration, and a value-driven approach. This model ensures alignment with overall business goals.
Example: A global retail chain using a dedicated pricing team can balance competitive pricing strategies with profitability goals across regions.

Case Study: Overcoming Pricing Dysfunction in B2B

A B2B hardware manufacturer faced fragmented pricing ownership. Sales teams offered discounts inconsistently, finance-focused narrowly on cost-plus models, and product teams pushed unfeasible price points or unprofitable.

Enter a fractional Chief Pricing Officer (CPO). By establishing clear roles, introducing structured decision-making, and aligning departments around value-based pricing, the company transformed its pricing strategy:

• Streamlined Decision-Making: Internal conflicts were resolved with a clear pricing governance framework.
• Value-Based Pricing Implementation: Products were repriced based on customer willingness to pay rather than costs.
• Cross-Functional Alignment: The CPO bridged communication gaps between sales, marketing, and finance, fostering collaboration.

How to Build Pricing Ownership

To avoid pricing dysfunction, organisations should establish clear ownership while fostering cross-functional collaboration. Here’s how:

1. Appoint a Pricing Champion
   Designate a dedicated leader or team responsible for pricing strategy, analysis, and implementation.
2. Establish Governance
   Create clear processes for pricing decisions, involving relevant departments but ensuring final accountability lies with the pricing owner.
3. Invest in Tools and Training
   Equip teams with analytics tools, pricing software, and training to support data-driven decisions.
4. Focus on Value, Not Costs
   Shift the organisation’s mindset from cost-plus pricing to value-based pricing, capturing what customers are willing to pay.

Don’t Let Pricing Be an Orphan

Pricing is too critical to leave unmanaged or siloed. At KABEN Partners, we specialise in helping organisations establish structured pricing ownership that drives profitability and growth.

Whether you need a fractional CPO, support in transitioning to value-based pricing, or guidance in building a cross-functional pricing team, we’re here to help.

Contact us today to turn pricing into your organisation’s most powerful growth engine.