The role of pricing in an organization: Pricing is a C-level topic

September 26, 2017

Pricing is a C-level topic

Much too often, pricing is seen as an operational task for experts, however, C-level involvement is crucial if a company wants to achieve sustainable profitable prices for its excellent performance.

When C-levels are involved in pricing, their companies generate on average 25 percent higher EBITDA margins than their competitors. An executive’s most important tasks are to give the price strategy a clear direction (e.g. volume growth vs. margins), create a pricing organization and instill a profit-oriented mindset among employees.

A model example of this is Porsche. Pricing is one of the highest priorities for its C-levels. They take an active role in pricing thereby contributing significantly to an ROS of over 15 percent – an unusually high figure for the industry.

Advice of Simon-Kucher experts:

Make sure that pricing is on the agenda of your board meetings and invest one day a month in the topic. Provide a clear price-strategic direction and regularly communicate the importance of pricing.