Pricing and CEOs: why top executives need to get involved

Purpose: Despite its increased adoption by small, medium and large firms, pricing continues to be ignored in the C-suite. C-suite executives have minimal understanding of what pricing can do and how it impacts a firm’s performance. After two years in the COVID-19 pandemic and the resulting economic crisis, consultants agree that the next wave of strategies and business models will require the development of strategic pricing capabilities, including analytics and software. Design/methodology/approach: The authors conducted 49 interviews with CXOs, VPs of pricing and CEOs of pricing software vendors to understand how the best-performing companies use pricing to drive profits and select pricing technologies. Then, supported by the Professional Pricing Society, the world’s largest organization dedicated to pricing, the authors conducted a 2020 survey of 540 pricing professionals to understand the perceptions of pricing in the C-suite and how top executives prioritize pricing investments. The authors complemented their own research with analysis of publicly available data, analyst presentations and public comments by CEOs on pricing. Findings: The authors propose a portfolio of 15 activities to include in the CEO’s strategic agenda and 10 actions to get started with in the short term. The next normal will not be based on business-as-usual. For the next three to five years, developing strategic pricing capabilities will give firms a competitive advantage over those who continue to neglect this hidden gem. Originality/value: In the context of the accelerating economic recovery, the authors address one of the most pressing priority for the C-suite. The authors focus on a series of actions and activities that the C-suite can take to accelerate recovery and focus on profitable growth.