We Don’t Need a New Pricing Strategy. We Need to Execute the One We Have.

Early in our work on pricing, we assumed that a strong strategy will automatically translate into better results. After all, we have the frameworks, the tiers, and the margin formulas in place. But what I have found, the hard way, is that pricing strategy on paper doesn’t guarantee results in the real world.

Execution is where the rubber meets the road—and what we need is not better pricing but better economic outcomes.

The Moment of Truth

My wake-up call came when we analyzed a key segment of our accounts. This segment of customers—similar in size, purchasing behavior, and expected value—were supposed to follow a consistent pricing logic. We expected a tight cluster of prices, some variance for volume or loyalty, but largely predictable behavior.

What we saw instead was chaos:

• Price spreads of more than 35% on the same SKUs.
  
  
• Customers in the wrong tiers, receiving discounts they shouldn’t.
  
  
• SKU peers priced inconsistently, creating negotiation openings.
  
  
• Promotional contracts that locked in price but offered no volume commitment.
  
  
• Sales reps improvising because the pricing systems didn’t hold up in practice.
  
  

In short, every gap in execution was costing us margin, confusing customers, and forcing our teams into firefighting mode to defend our pricing policies. The strategy wasn’t broken—our execution was.

A Hard Look at the Causes

We could have blamed sales for discounting, or finance for slow updates, or marketing for over-promising. But the truth was systemic:

1. Outdated customer tiers – They were based on legacy assumptions rather than actual buying patterns.
   
   
2. Misaligned SKU pricing – Products that should behave like siblings were priced inconsistently, eroding trust and inviting negotiation.
   
   
3. Cost-plus base prices – Static formulas hadn’t kept pace with the market. Competitive realities had shifted, but our baseline list pricing hadn’t.
   
   
4. Promotional contracts with no strings – Discounts applied without volume or commitment guaranteed the wrong behavior.
   
   
5. Frontline improvisation – Sales reps were left to guess prices because the logic didn’t defend itself.
   
   

The problem wasn’t individual behavior; it was a system that rewarded improvisation and punished consistency.  And created a great deal of internal conflict.

The Profit Streams Lens

I reframed the problem through what we call the Profit Streams framework. The idea is simple: Profit Streams are created when three very basic things align—customer segmentation, product portfolio pricing alignment, and disciplined execution.

Inconsistent execution breaks all three. If customers are mis-tiered, products mispriced, or sales improvising, there is no repeatable path to sustainable profitability. You can tweak price levels endlessly, but the leaking will persist until execution is fixed.

How We Went About Fixing It

We approached the challenge systematically, separating responsibilities but collaborating on recommendations between Product and Pricing. This shared accountability, while acknowledging individual expertise, ensured each team could focus on its role in contributing to a Profit Stream.

Product:

• Realigned product families so that similar products follow consistent price relationships.
  
  
• Closed portfolio gaps that were creating negotiation pressure.
  
  
• Coordinated changes with Pricing before updates hit the market.
  
  

Pricing:

• Rebuilt customer tiers based on actual purchase behavior and value, not legacy assumptions.
  
  
• Updated base prices to reflect market realities, not just cost-plus calculations.
  
  
• Tied every promotional discount to a measurable commitment—volume, exclusivity, or both.
  
  
• Simplified price logic so that sales could confidently explain and defend prices.
  
  

This was not about adding more controls or stricter rules. It was about removing ambiguity and giving our teams the confidence to make good pricing decisions in the field.

The Results

The outcomes were immediate and measurable:

• Reduced negotiation – When tiers and products aligned, the number and magnitude of discounting was reduced, discounts became predictable and justified.
  
  
• Improved Average Realized Price and margin – Correcting baseline prices and enforcing commitments stopped leaks.
  
  
• Increased trust – Customers understood the pricing logic, and sales could defend it with confidence.
  
  
• Empowered teams – Sales reps spent less time guessing and more time selling; product teams could focus on portfolio strategy instead of firefighting the commercials.
  
  

The pricing strategy didn’t change, but the economic outcomes did. 

Lessons Learned

1. Strategy isn’t enough. Even the best pricing model fails without disciplined execution.
   
   
2. Clarity beats complexity. Teams don’t need more rules—they need guidance that make sense and can be applied consistently.
   
   
3. Execution creates Profit Streams. Margin isn’t just a number—it’s the result of customers understanding value, product aligned logically, and teams executing consistently.
   
   

I realized that every company with pricing collaboration faces this challenge. Many assume discounts are purely a sales problem or margin erosion is inevitable. In reality, it’s about the hidden gaps—the misalignments that create noise in the data. Fix the gaps, and the margins follow.

Looking Forward

This experience reshaped my approach to pricing. Now, every new product, customer tier, or promotion is evaluated not just for strategy, but for how it will execute in practice. I track alignment, consistency, and commitment as rigorously as price points or margin targets.

Profit Streams are not theory—they are visible, measurable, and repeatable. Execution is the bridge between strategy and sustainable results, and that bridge requires constant attention.

The takeaway is clear: If you want to create reliable Profit Streams, you have to see the gaps, fix the system, and empower teams to act with confidence.