From Optimizing to Strategizing: When Pricing Earns a Seat at the Table

From Optimizing to Strategizing: When Pricing Earns a Seat at the Table

By the time an organization reaches Level 3, pricing has a functioning operating model. Rules are defined. Governance is structured. Execution follows approved workflows. Monitoring identifies leakage and exceptions. The organization can manage pricing consistently and has the mechanisms to improve it over time.

For many organizations, Level 3 is a significant accomplishment and a sufficient target. Not every business needs pricing to operate at Level 4 or 5. But for organizations competing in complex markets with high pricing leverage, the transition from Level 3 to Level 4 is where the greatest strategic value is unlocked.

This transition is different from the earlier maturity leaps. Moving from Level 1 to Level 2 is about establishing discipline. Moving from Level 2 to Level 3 is about building consistency. Moving from Level 3 to Level 4 is about changing the role that pricing plays in the organization.

What Level 3 Does Well and Where It Plateaus

Level 3 organizations are operationally sound. Pricing intent is explicit and translated into standardized rules and guardrails. Design models support version control and scenario testing. Governance frameworks ensure consistent enforcement. Execution follows governed workflows. Monitoring identifies performance gaps.

What Level 3 does not typically do is connect pricing to broader strategic conversations. Pricing at Level 3 receives direction from strategy. It executes that direction reliably. But it does not contribute to the formation of strategy itself.

This shows up in several ways. Pricing performance data may be reviewed by the pricing team but rarely influences portfolio decisions, investment priorities, or competitive strategy at the leadership level. Governance manages risk effectively but does not actively balance speed and agility against market opportunity. Pricing structures reflect segmentation, but that segmentation may be static rather than responsive to evolving market conditions.

Level 3 is a well run operation. Level 4 is a strategic capability. The difference is not just in what pricing does, but in how the rest of the organization engages with it.

What Changes at Level 4

At Level 4, pricing becomes a participant in strategic planning rather than a recipient of it.

Pricing strategy is aligned directly to growth, margin, and portfolio objectives and is consistently executed against those objectives. This means that pricing is not just reflecting business strategy. It is helping to shape it. When the business evaluates new market entry, product launches, or competitive responses, pricing insight is part of the analysis from the beginning, not added after the decision has been framed.

Strategic price structures reflect competitive positioning, segmentation, and margin objectives in ways that are intentional and dynamic. Pricing design is no longer about maintaining static structures. It is about adapting structures to capture value as market conditions evolve.

Governance balances speed and control by differentiating between decisions that require scrutiny and decisions that can move quickly within established frameworks. This enables faster execution for the majority of pricing decisions while maintaining discipline where it matters most.

Performance insights inform strategic decisions across functions, not just within the pricing team. Sales leadership uses pricing data to understand deal quality. Finance uses it to forecast more accurately. Product uses it to evaluate segment performance. Pricing becomes a shared source of intelligence rather than a siloed function.

And pricing decisions are synchronized across channels, regions, and systems, ensuring that the organization speaks with one voice in the market even as it differentiates by segment and geography.

What the Transition Demands

The shift from Level 3 to Level 4 is primarily a people and culture challenge, not a systems or process challenge.

It requires pricing leadership to operate at a strategic level. This means shifting focus from managing rules and workflows to interpreting performance data, identifying market opportunities, and influencing business decisions. Pricing leaders at Level 4 are not just process owners. They are strategic contributors who participate in portfolio discussions, growth planning, and competitive analysis.

It requires the broader leadership team to engage with pricing as a strategic input. This is often the harder change because it requires leaders outside of pricing to change how they think about the function. Pricing must be invited into strategic conversations, and its insights must be taken seriously alongside sales, product, and financial perspectives.

It requires that pricing data be accessible, trusted, and integrated across functions. Strategic conversations require shared facts. If pricing performance data is siloed, inconsistent, or mistrusted, it cannot serve as a foundation for cross functional decision making.

And it requires a willingness to let pricing influence decisions that have traditionally been made without it. This includes questions like which segments to prioritize, where to invest in growth versus margin, and how to respond to competitive moves. When pricing has a seat at the table, the quality of these decisions improves. But granting that seat requires organizational commitment.

Why It Matters

The practical impact of reaching Level 4 is that pricing stops being a constraint and starts being a driver.

At Level 3, the organization can execute pricing well. It minimizes leakage, maintains consistency, and manages exceptions. But it is fundamentally reactive. It responds to strategy. It processes decisions. It reports results.

At Level 4, the organization uses pricing to create value proactively. Pricing insight identifies opportunities before they are obvious. Performance data reveals where the business is leaving money on the table or where it is overinvesting in segments that cannot sustain it. Governance enables speed where the market demands it. And the entire pricing capability evolves in step with business strategy rather than lagging behind it.

This shift does not happen overnight. It builds on the operational foundation that Level 3 provides. But the organizations that make this transition gain something that operational excellence alone cannot deliver: pricing as a source of competitive advantage that compounds over time.

This is the fourteenth in a series exploring how organizations can connect pricing intent to execution through disciplined operating models, clear governance, and scalable workflows.

Explore more on pricing, revenue management, and commercial program optimization at the IMA360 Learning Center:

Chris Newton is Vice President of Marketing and Sales at IMA360, where he leads brand strategy, market expansion, and customer engagement. With a background spanning commercial strategy and revenue operations, Chris works closely with enterprise teams navigating the complexities of pricing, programs, and profit optimization. Connect with him on LinkedIn: