In two jobs prior to Dstillery, among other things, I had responsibility for managing product pricing. In that role, I’ve priced hardware, software, SaaS services, professional services, support services, and labor. At some point, I had jotted down a bunch of notes on how the pricing process should work and I thought I would share them here.
It has been said that pricing is not an event, it is a process. And it is not just a process that should be owned by finance, sales or marketing but one that needs to be truly cross-functional.
This diagram outlines the key activities that go into setting, managing, and measuring prices. The various activities can be, and often are, owned by different functions depending how each organization is structured, but there needs to be someone looking across all of these activities in a holistic manner. The key role of the “pricing owner” is to coordinate across all the interested functions and drive the process to establish the best pricing model for the company.