Setting Strategy and Intent: Where Pricing Direction Lives or Dies

Setting Strategy and Intent: Where Pricing Direction Lives or Dies

Before pricing can be designed, governed, or executed, it must have direction. That direction is what setting strategy and intent is meant to provide.

This is the first step in the pricing workflow, and it is the one most often taken for granted. Organizations tend to assume that pricing direction is already clear because it has been discussed at the leadership level or documented in a strategy presentation. But there is a significant difference between discussing pricing intent and making it operational. The first is a conversation. The second is a discipline.

When this step is done well, the rest of the pricing workflow has a foundation. Decisions are anchored. Trade offs are resolved before they reach the point of execution. Guardrails exist. When this step is weak or absent, every downstream decision becomes an act of interpretation, and the results reflect it.

What This Step Actually Produces

Setting strategy and intent is not about creating a pricing strategy from scratch. It is about translating business strategy into pricing direction that is specific enough to execute.

In practical terms, this step should produce several things.

A clear articulation of where pricing competes and what it optimizes for. This means explicit positioning across growth, margin, market share, and differentiation. Not all of these can be maximized simultaneously, and the intent should make those trade offs visible.

Explicit resolution of key pricing trade offs. Every organization faces recurring tensions between short term revenue and long term value, between volume and margin, between customer acquisition and retention. When these trade offs are resolved before pricing reaches execution, teams can act with confidence. When they are not, they are resolved informally and inconsistently at the point of sale.

Defined guardrails and boundaries. This includes price floors, discount limits, and clear definitions of where flexibility is allowed and where it is not. Guardrails are not about restricting the business. They are about creating the conditions for disciplined execution.

Clear ownership for defining and updating pricing intent. Someone must own this step. Without ownership, pricing intent drifts, and the organization defaults to whatever was last agreed upon, even when market conditions have changed.

Strategic success measures. The organization should know what success looks like for pricing, defined by target outcomes by segment, portfolio, or channel, and should have signals that indicate when intent needs to be revisited.

Why This Step Gets Skipped

Setting strategy and intent is not technically difficult. It does not require advanced analytics, sophisticated systems, or large teams. What it requires is organizational discipline, and that is why it gets skipped.

In most organizations, the pressure to move quickly into execution is intense. There are deals to close, price lists to publish, and commercial deadlines to meet. Taking the time to explicitly document pricing intent, resolve trade offs, and define guardrails feels like overhead when there is urgent work to be done.

The problem is that this urgency is exactly what creates the execution problems that consume even more time and bandwidth downstream. When pricing intent is implicit, design teams build pricing structures based on assumptions. Governance teams approve exceptions without clear criteria for what should or should not be allowed. Sales teams negotiate without a shared understanding of what the organization is trying to achieve. Each of these gaps compounds, and the organization spends far more effort cleaning up inconsistency than it would have spent establishing clarity at the start.

There is also a political dimension. Pricing trade offs often involve difficult conversations between leadership, sales, finance, and product. Making these trade offs explicit means putting decisions on the record, which some organizations prefer to avoid. But the trade offs exist regardless. The only question is whether they are resolved deliberately or left for downstream teams to figure out on their own.

What Happens When Intent Is Implicit

When pricing intent is not made explicit, it does not disappear. It simply gets replaced by whatever the most immediate pressure demands.

Sales teams default to what closes the deal. Finance defaults to what protects the margin. Product defaults to what supports adoption. Each function optimizes for its own priority, and the result is pricing behavior that is internally inconsistent and difficult to diagnose.

Discounts drift. Exception rates climb. Pricing becomes increasingly reactive because there is no proactive framework to anchor decisions to. The organization may still achieve reasonable results in aggregate, but it does so inefficiently, through constant intervention and correction rather than through a system that produces the right outcomes by design.

Over time, this pattern becomes self reinforcing. The more pricing relies on ad hoc decisions, the harder it becomes to introduce structure. Institutional knowledge concentrates in a few individuals. Processes calcify around workarounds. And the cost of the missing first step compounds with every pricing cycle.

Making Intent Executable

The path from implicit intent to executable intent is not a single event. It is a progression.

It begins with documentation. Even an imperfect written statement of pricing direction is better than an assumed one. The act of writing down what pricing is trying to achieve forces clarity and reveals disagreements that would otherwise surface later in less productive ways.

It continues with alignment. Pricing intent should not be owned by a single function. It should be developed with input from leadership, finance, sales, and product, and it should reflect the business strategy, not just the pricing team’s view of what is optimal.

It matures through structured updates. Markets change. Competitive dynamics shift. Customer needs evolve. Pricing intent that was relevant six months ago may not be relevant today. Organizations that treat this step as a living process rather than a one time exercise maintain alignment between strategy and execution over time.

And it becomes durable when it connects directly to the next steps in the pricing workflow. Pricing intent that exists only in a strategy document provides limited value. Pricing intent that flows into design, governance, execution, and monitoring creates the foundation for a pricing capability that improves continuously.

Getting this step right does not guarantee perfect pricing. But getting it wrong, or skipping it entirely, almost guarantees that everything downstream will be harder, slower, and less effective than it needs to be.

This is the fifth 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: