Pricing strategy
Should your pricing start with products or customers?
Choose a pricing approach that fits how your business creates value: product economics, customer relationships, or a combination of the two.
Product-led pricing starts with the economics and demand for an item or offer. Customer-led pricing starts with the relationship, customer value and likelihood of staying or buying more. Many businesses need both. The useful question is which commercial decision you are trying to improve, and what evidence supports it.
Key takeaway
Choose the unit of analysis before choosing a model: a product, a customer relationship, or a product within a customer segment.
Start with products when assortment economics drive the decision
A product view is useful when prices, costs, substitution and promotions vary across a large assortment. The objective might be to improve category contribution while protecting the competitiveness of frequently compared products.
Consider two similar cleaning products sold by a wholesaler. Discounting one may increase its volume while moving sales away from the other. A useful review looks at category contribution, not just the promoted item. Cost, pack size and purchase frequency also matter when comparing price levels.
Start with customers when relationship value drives the decision
A customer view is useful for renewals, retention offers and account terms. It brings together price, service costs, expected future contribution and the likelihood that the customer will remain active.
Two accounts buying the same products may have different delivery requirements, order patterns and negotiation histories. A margin comparison should make those differences visible before recommending a discount change. Revenue alone is an incomplete measure of account value.
Use a hybrid approach for negotiated B2B pricing
A practical B2B architecture often combines a product price structure with segment guidance and rules for individual deals. This gives sales teams flexibility while making exceptions visible.
- Product structure: list prices, pack relationships and category margin expectations.
- Customer guidance: segment terms that reflect purchasing patterns and service requirements.
- Deal controls: target prices, approval thresholds and a recorded reason for exceptions.
- Review: realised margin and win rate by product, segment and sales channel.
Treat personalisation as a separate choice
A customer-led approach does not require an individual price for every person. Segments, consistent renewal rules and transparent service tiers may be more useful than highly tailored offers. Individualisation adds demands on data, governance and customer communication.
Ask whether the added complexity improves a decision your team can actually execute. If a salesperson cannot understand the guidance, or an account manager cannot explain an offer, the sophistication may be getting ahead of the operating model.
Three questions for your next pricing review
Use these questions to locate the next analytical step:
- Does the opportunity come mainly from product economics, customer behaviour or deal execution?
- Can the available data distinguish a price effect from changes in mix, seasonality or customer selection?
- Who will use the recommendation, and where will the resulting decision be recorded?
This Pricing Precision edition is adapted from Are you pricing for products or people? by Hans Christian Ekne at EKNE Consulting, originally published on 26 August 2025. It develops the practical implications for pricing and commercial teams.