The 5 Levels of Pricing Maturity: Where Does Your Organization Stand?

The 5 Levels of Pricing Maturity: Where Does Your Organization Stand?

Pricing maturity is one of those concepts that most organizations believe they understand until they try to assess it honestly.

The challenge is that maturity is not a single attribute. An organization can have sophisticated pricing strategy but immature governance. It can have advanced systems but weak learning loops. It can have experienced pricing professionals but fragmented processes. Maturity is multi dimensional, and progress in one area does not automatically translate to progress in others.

This is why a structured maturity framework is useful. Not as a scorecard to be optimized, but as a diagnostic tool that reveals where the organization is strong, where it is constrained, and where targeted investment will produce the greatest return.

The Five Levels

The maturity model we use defines five levels, each representing a distinct stage in how pricing operates within an organization.

Level 1, Executing, describes organizations where pricing is largely reactive. Intent is implicit and fragmented. Decisions are driven by immediate needs. Processes are manual. Governance is informal. Reporting is after the fact. The same issues recur because there is no mechanism for learning from them. This is not a judgment of the people involved. It reflects an operating model that was built for a simpler environment.

Level 2, Planning, describes organizations that have begun to document and structure their pricing. Intent exists on paper, even if it is inconsistently applied. Price lists and models provide some foundation. Approval workflows are defined, though not always enforced. Partial automation reduces some manual burden. The organization recognizes it has a pricing challenge and has started to address it, but execution still relies heavily on individual effort and workarounds.

Level 3, Optimizing, describes organizations where pricing is governed by explicit rules and standardized workflows. Intent is translated into guardrails that constrain behavior consistently. Pricing models support version control and scenario testing. Governance is structured and auditable. Monitoring identifies leakage and exceptions regularly. At this level, the organization has a functioning pricing operating model and is beginning to manage pricing as a discipline rather than a collection of ad hoc decisions.

Level 4, Strategizing, describes organizations where pricing is aligned directly to business strategy and integrated across functions. Pricing intent reflects competitive positioning, segmentation, and portfolio objectives. Governance balances speed and control. Execution is synchronized across channels and regions. Performance insights inform strategic decisions, not just pricing team discussions. At this level, pricing is a contributor to strategic planning, not just a recipient of strategic direction.

Level 5, Maximizing, describes organizations where pricing operates as a continuous, adaptive capability. Strategy evolves based on lifecycle economics and outcome based learning. Advanced analytics and AI assisted simulation support decision making within governed boundaries. Risk based governance adjusts dynamically. Pricing is managed to maximize customer lifetime value and deal economics, not just individual transactions. At this level, pricing is a durable source of competitive advantage.

Where Most Organizations Actually Sit

In our experience, most organizations sit between Level 1 and Level 3. The distribution is not uniform, and it is common for an organization to be at different levels across different steps of the workflow.

An organization might have Level 3 maturity in price design, with structured models and scenario analysis, but Level 1 maturity in monitoring, with no systematic way to track whether those designs are performing as expected. It might have Level 2 governance, with defined approval workflows, but Level 1 execution, with pricing changes still entered manually into systems.

This unevenness is normal, but it has consequences. The overall performance of the pricing capability is limited by its weakest step. Advanced pricing models are undermined if governance cannot enforce them. Sophisticated strategy is wasted if execution introduces errors. Strong monitoring provides no value if learning does not feed back into improvement.

Understanding the maturity of each step, not just the overall average, is what makes the framework useful as a diagnostic tool.

The Gap Between Perception and Reality

One of the most valuable outcomes of a maturity assessment is revealing the gap between where the organization believes it operates and where it actually operates.

This gap exists in nearly every organization we work with. Leadership typically perceives pricing maturity to be one to two levels higher than it actually is. This is not because leadership is uninformed. It is because the view from the top focuses on strategic intent and high level capabilities, while the friction, workarounds, and manual effort that characterize day to day pricing execution are invisible from that vantage point.

Sales teams, pricing analysts, and operations staff often have a more accurate view of maturity because they experience the constraints firsthand. Closing this perception gap is one of the most important early outcomes of a pricing transformation effort, because it aligns the organization on what actually needs to change.

Using the Framework Practically

The maturity framework is most useful when it is applied step by step across the pricing workflow and dimension by dimension across the operating model.

For each step of the workflow, from strategy and intent through learning and adjustment, the organization should honestly assess its current level. This assessment should involve people from multiple functions, not just the pricing team, because each function sees a different part of the reality.

For each operating model dimension, people, process, systems, and data, the organization should identify which dimensions are enabling progress and which are constraining it. Maturity is rarely limited by a single factor. More often, it is the interaction between dimensions that creates the constraint.

Once the assessment is complete, the organization can identify its highest impact opportunities. These are typically the steps and dimensions where maturity is lowest relative to the organization’s strategic ambition, and where improvement would unlock performance across the broader workflow.

The goal is not to reach Level 5 in every dimension. It is to reach the level of maturity that allows the organization to execute its pricing strategy reliably, efficiently, and with the ability to improve over time. For some organizations, that might be Level 3. For others, Level 4 or 5. The framework does not prescribe a destination. It illuminates the path.

This is the twelfth 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: