Originally published on Forbes in Aug 2025. This article has been republished here.
19 Steps For Building A Profitable And Competitive Pricing Strategy
When developing a pricing strategy for your organization, getting the foundational steps right can make the difference between long-term profitability and constant margin pressure. As a leader, you’re tasked with balancing two competing forces: ensuring your offerings are attractive in the market while still protecting—and ideally expanding—your margins.
Before locking into a final model, you need a clear framework for analyzing the data and aligning stakeholders on objectives. To help, 19 Forbes Business Development Council members share some practical first steps for establishing a pricing strategy that maximizes profitability without compromising your competitive edge.
1. Research Customer Drivers And Competitor Gaps
The first step is deep research into both your customers and competitors, but not just surface-level. Look at what truly drives buying decisions: emotional triggers, perceived value and urgency. Then, map that against competitor blind spots to find pricing opportunities they’ve missed. That’s where smart profit lives. – Alexey Kachalov, UniOne
2. Assemble A Cross-Functional Pricing Team
Pricing isn’t just a sales-led motion; it should include decision-makers from across the business. I recommend creating an internal “tiger team” of cross-functional leaders to be involved in any pricing change discussions, including product marketing, finance and operations, sales and customer success. While one may have more influence on price, it’s important to have alignment as a business. – Toby Carrington, Seismic
3. Prioritize Cost Efficiency As A Foundation
Cost management is a key first step. Profitability is determined by pricing and cost. Cost efficiency allows you to squeeze more profit while remaining competitive. Often, pricing strategies just focus on market penetration, but not on cost efficiency. By starting with a strong cost foundation, you not only maximize profitability, but you also enable better controls and levers around price elasticity and market changes. – Mark Cerminaro, RAPID FINANCE
4. Balance Fairness With Profitability Goals
Considering the balance between fairness versus maximizing profitability, while also understanding that what the client values is imperative. This needs to be closely studied while managing your resource cost, production costs and execution time commitments. Understand what the upper threshold is in each market, and then bring equal if not more value, while controlling your internal costs obsessively. – Anoma Baste, Space Matrix
5. Map Pricing To Perceived Customer Value
Start with understanding your customer’s perceived value. Without this, pricing is either a guess or a race to the bottom. Map value to segments, benchmark competitors and align pricing to the outcomes your product delivers, not just its features. Value-based selling will always beat feature selling. – Luke Boddis, Checkout.com
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6. Align Pricing With Customer Outcomes
Start with what your solution is worth to the customer, not just what it costs you. Build pricing that reflects outcomes, with options that scale as value increases. A shared-success model keeps you competitive while protecting margins and rewarding results. – Michael Fritsch, SavvyCOO
7. Tailor Pricing To Your Industry Dynamics
Pricing strategy depends on what industry you are in. If you are in new product development, the strategy will depend on the value versus the premium to the customer. If you are in an industry or representing a product that is commoditized, strategy will be driven by driving costs down and being competitive. – Ruchir Nath, Dell Technologies
8. Define Margins By Understanding Total Costs
Start by truly understanding your total cost—not just IT or licensing costs, but time, tools and talent. Hence, this is why most companies at the top leverage diverse GTM models like partner ecosystems. Only then can you define a margin goal that aligns with your GTM motion. Pricing is not a back-office task; it is a core leadership trait. In a volatile market, it is not optional. – Curtis Brinkerhoff, Impartner, Inc.
9. Ground Pricing In Thorough Market Research
One key first step is research. Before developing a pricing strategy, understand your target buyers—what challenges do they face, how do they make decisions and what is solving those problems worth to their business. Price should be based on value and backed up with research, including market, customer, competitive analysis and cost analysis. – Julie Thomas, ValueSelling Associates
10. Adopt Dynamic And Evolving Pricing Models
It’s important in today’s over-competitive landscape to have dynamic pricing-based strategies and offer value-based pricing to your customers and clients. In a general sense, no organization wants to be the highest priced provider in their segment, and yet at the same time to leave money on the table, so pricing adjustments should also be considered an ongoing organizational activity like marketing. – Mustansir Paliwala, Zomara Group
11. Signal Brand Positioning Through Pricing Clarity
Start with clarity on your product’s value and brand positioning. Research what customers are truly willing to pay, balancing market fit with profitability. Even a premium product must remain attainable enough to drive sales without undercutting your margins. Pricing isn’t just numbers—it’s how you signal value, quality and your place in the market, shaping how customers perceive you. – Anna Jankowska, RTB House
12. Set Clear Pricing Goals From The Start
Start by defining your pricing goal, whether it’s profit, growth or positioning. Then, focus on truly understanding what your customers value and what feels fair to them. A strong pricing strategy reflects the real worth your product brings, creating value for both the business and the people it serves. – Eddy Vertil, Vertil & Company
13. Evaluate Supply, Demand And Willingness To Pay
The first step company leaders must consider is to deeply analyze market supply and demand dynamics, accurately assess customer willingness to pay and clearly understand which elements of value (functional, emotional and economic) most influence customers’ buying decisions. This holistic understanding ensures pricing aligns precisely with customer value perceptions and market realities. – Salice Thomas, Wipro Limited
14. Anchor Pricing In The Impact You Deliver
Know your value. The first step is understanding the true impact your product has: clinically, operationally and financially. If you don’t believe in that value, no price will feel right. Start with outcomes, then align pricing to the measurable difference you create. – Scott Hozebin, DirectCare AI
15. Test Tradeoffs To Uncover The Pricing Sweet Spot
Start by understanding what customers truly value and how much they’re willing to pay. This helps anchor pricing in perceived value, not cost. Then model tradeoffs across price, retention and margin using historical and experimental data. And finally, run targeted price tests to uncover the sweet spot where conversion meets staying power. – Shikha Agarwal, Yelp
16. Forecast Competitor Moves To Stay Competitive
We structure our pricing strategy by analyzing the competitive landscape and the value customers place on our product. By forecasting competitors’ moves, we focus on remaining competitive while maximizing profitability. We balance our objectives with market demand, ensuring we avoid price wars and protect market share while maintaining healthy margins and delivering value to customers. – Ali Faizan Rizvi, Mint Gateway
17. Build Confidence In Communicating Your Price
I like to stress my own confidence with pricing. If I am unsure about the price, customers will feel it. Before launching my first service package, I practiced saying the price out loud until it felt natural and ensured my team believed in the value, too. Confidence sells just as much as features. – Bryce Welker, The CPA Exam Guy
18. Leverage Unit Economics To Strengthen Margins
Effective pricing starts with understanding unit economics, cost structures and supply chain dynamics. These are key drivers of pricing power and margin growth. Competitiveness stems from product differentiation, added value and customer perception. Constantly reviewing value-based pricing, bundling, partnerships and pricing reviews enable profitability and build category leadership. – Suhail Syed, Vesper Telecom
19. Validate Pricing With Direct Customer Feedback
Conduct a comprehensive value analysis to understand what customers actually pay for versus what you think they value. This involves mapping your product’s tangible and intangible benefits against competitor offerings, then validating through direct customer feedback. Without this foundation, pricing becomes guesswork rather than strategic positioning. – Vivek Vishal, Honeywell
