Pricing is a position, not a number
Ask most teams how they set their price and you'll hear some version of three answers: we looked at competitors, we added a margin to cost, or we picked a number that felt right and never revisited it. All three treat price as an arithmetic output. It is not. Price is the loudest single statement a business makes about who it is for — and almost everyone whispers it by accident.
Your price is read before your pitch deck. It is the first sentence of your positioning, whether you wrote it or not.
I hold a pricing certification from UVA and BCG, and I've run pricing work across pharma, FMCG, aviation and lifestyle. The certification taught me the models. The fieldwork taught me that the models are the easy part. The hard part is that pricing is a decision about identity, and most organisations are conflict-averse about identity.
The variable everyone optimises is the wrong one
The default pricing exercise tries to find the revenue-maximising point on a demand curve. Fine, as far as it goes. But it quietly assumes the customer is fixed and only the number moves. In reality, the number selects the customer. Drop your price 30% and you don't just sell more — you change who buys, why they buy, what they expect, and what they'll tolerate. You've recruited a different audience with a different P&L attached.
So the real question is never "what's the optimal price?" It's "who do we want to be for, and what price tells them this is theirs?" Get that right and the number nearly sets itself.
Three things to fix before you touch the number
1. Willingness to pay is a research question, not a guess
Teams routinely set price by intuition and then run discounts to fix the intuition. That's backwards. Willingness to pay can be measured — through structured research, conjoint-style trade-offs, and watching what customers actually choose when forced to rank features against cost. At Go Airlines, pricing and segmentation work delivered 8% savings in digital spend precisely because we stopped guessing what segments valued and measured it. The discipline is unglamorous and it pays for itself.
2. Packaging is half the strategy
Most "pricing problems" are packaging problems wearing a disguise. How you bundle, tier, and gate features decides how customers self-sort across your price points. A good three-tier structure doesn't just offer choice — it makes the middle tier feel obviously correct, anchors the premium tier as aspirational, and lets the entry tier qualify buyers without devaluing the rest. If you've only ever debated the number and never the package, you've been playing one move of a three-move game.
3. Unit economics set the floor, not the price
Cost tells you the price below which you bleed. That's the only thing it tells you. Treating cost-plus as a pricing strategy hands the entire question of value over to your accounting conventions. Know your unit economics cold — then set price against willingness to pay and positioning, with cost as a floor you simply refuse to cross.
Cost tells you where you'd go bankrupt. It has no opinion on what you're worth.
The courage problem
Here is the part the models never mention. The most common pricing failure I see isn't analytical — it's nerve. Teams find that customers would happily pay more, and then don't raise the price, because raising it feels aggressive, or risky, or "not who we are." So they leave margin on the table indefinitely to avoid a moment of discomfort.
The reverse failure is just as common: a premium brand that keeps discounting to chase volume, slowly training its best customers to wait for a sale and teaching the market that the premium was never real. Every discount is a sentence in your positioning too. Enough of them and you've rewritten who you are without deciding to.
A migration is a strategy, not a memo
When the analysis says you should reprice, the failure mode is to announce it and brace. Existing customers anchored to the old price experience a change as a loss, and loss is felt roughly twice as hard as an equivalent gain. So a price increase that's perfectly justified can still trigger churn out of proportion to its size.
The work is in the migration design: who moves first, who's grandfathered and for how long, what new value lands alongside the new price, and how the change is narrated. Done well, a reprice strengthens the relationship — the customer sees investment, not extraction. Done as a memo, it reads as a tax.
The test
Here's a single diagnostic I use. Ask a leadership team: "If a customer asked why you cost what you cost, what's the one-sentence answer?" If the answer is about your costs, you're pricing arithmetic. If it's about your competitors, you're pricing defensively. If it's about who the product is for and what it makes possible for them — you're pricing a position. Only the last one compounds.
Pricing is the fastest lever on the P&L and the one most teams touch least. Not because it's hard to move, but because moving it means saying out loud who you're for. That sentence is worth getting right.