Why Is the Pricing Function Still Undervalued?
In the world of business, pricing should be a key strategic lever. Yet in many organizations, it remains an underfunded, under-recognized function, seen as a cost center, not a growth engine. Why is that still the case in 2025, despite decades of evidence showing pricing’s disproportionate impact on profitability?
That question was at the heart of one of our Pricing Gym roundtable on the 31st of July, where pricing leaders and commercial experts from various industries including healthcare, printing, digital, and financial services shared real-world stories of what’s working and what’s still painfully broken.
Here’s what emerged:
1. Pricing Pressure Is Mostly Internal, Not External
Most companies assume pricing pressure is driven by procurement, competition, or economic conditions. But across industries, our participants said the biggest strain comes from within, specifically, sales teams lobbying for discounts.
“In some cases, customers do not push back on the price. The discount request comes from the salesperson often unprovoked.”
This internal resistance often stems from fear: fear of losing the deal, fear of confrontation, or fear of challenging long-standing relationships. The outcome? Margin leakage isn’t driven by external forces but internal mindset and incentives.
2. Value-Based Pricing Is Overused and Misunderstood
There’s been a surge in organizations claiming to adopt value-based pricing. But when asked to define it, most describe segmentation logic or cost-plus hybrids.
“True value-based pricing - the kind where you charge based on the economic benefit you deliver - is maybe applicable to 5% of most B2B portfolios. The rest is usually pricing differentiation based on customer segmentation.”
In other words, labeling pricing as ‘value-based’ doesn’t make it so. Real value-based pricing requires measurable customer impact, willingness-to-pay insights, and courage to move away from cost anchors. Most companies aren’t ready (or equipped) to execute it fully.
3. The Pricing Function Is Treated as Disposable
One of the most disturbing truths shared: even high-performing pricing teams are subject to cyclical hiring and firing. One participant shared how her team delivered €25M in pricing-driven growth for two consecutive years only to be disbanded.
Why? Because pricing is still seen as an enabler at best and overhead at worst. When budgets tighten, pricing is viewed as non-essential. “We were acquired by private equity who valued pricing but even then, it’s a fight to prove why we’re not just back-office support.”
4. When Deals Are Lost, Pricing Gets the Blame
Another common thread: pricing is the scapegoat when deals are lost—even when price isn’t the problem. I recalled a lost deal in Mexico: “Sales blamed price. But when I spoke to the client, the real issue was service, the customer had asked for 24/7 support and never got a reply.”
This kind of misattribution is rampant. We should urge sales teams to measure deal losses properly: “In my experience, less than 10% of losses are truly about price. It’s often product fit, service, or unmet expectations.
5. The C-Suite Takes the Credit, But Rarely Pays It Forward
Even when pricing success is clear - when price increases land, when margin improves - it’s rarely the pricing team gets the spotlight.
“When things go well, the CEO or CFO says, ‘Look what we did!’ When they don’t, it’s ‘Pricing failed.’”
This asymmetric recognition damages morale, stunts investment, and creates a revolving door of pricing talent.
6. Pricing People Need to Sell Themselves Better
The irony? Pricing professionals are brilliant at capturing value but often poor at marketing themselves. “You need a value proposition for pricing. If the C-suite doesn’t get it, that’s not their fault, it’s yours.”
The function needs to tell a better story backed by data, yes, but also emotion and relevance. It must brand itself not as a blocker, but as a builder. Not as a gatekeeper, but as a guide.
7. Communication Breakdown Is the Real Killer
Communication came up repeatedly as a core capability gap. Pricing teams often struggle to bridge the language and personality gap between analytical profiles and high-pressure sales teams.
If we refer to DISC models: “Pricing people are ‘blue’: structured, logical, precise. Salespeople are ‘red’: fast, emotional, intuitive. They don’t speak the same language.” This disconnect kills pricing initiatives. Even well-designed price increases fail when poorly communicated.
8. Investment in Tools and Talent Remains Weak
One participant shared her experience in Peru’s banking sector: interest in pricing is rising, but funding remains minimal. “They see the value but won’t invest. Resources are limited, and the challenge is huge.”
Even global companies face this. Pricing leaders often lack budgets for tools, travel, or training. “We were flying blind, expected to drive transformation, but without fuel.”
→ Conclusion: The Undervaluation of Pricing Is a Strategic Blind Spot
Pricing is still treated as a tactical lever, one to pull during inflation or hide when cost pressure fades. But that’s exactly the problem. Pricing isn’t just about mechanics, it’s about mindset, storytelling, and commercial courage.
Until organizations give pricing the investment, voice, and credit it deserves, they’ll keep leaving value on the table and losing talent at the margins.
If you work in pricing: start branding your function. Measure what matters. Tell better stories. Fight for your seat.
And if you’re a leader: ask yourself: do we treat pricing like a strategic muscle, or atemporary fix? The answer may define your next wave of growth.
Let’s fix the undervaluation. Together.
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Laurent Dosogne is a partner at Nexo Consulting and host of the Pricing Gym, a peer-to-peer forum for pricing leaders to pressure-test ideas and share candid insights.
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