The Pricing Conversation Most Businesses Never Have

There is a number at the centre of every commercial transaction that receives less strategic attention than almost any other in business.

Not the marketing budget. Not the sales target. Not the revenue forecast. The price.

For a decision that determines margin, positions the brand, and shapes the entire customer relationship, pricing receives a rather casual treatment in most organisations. It is set by spreadsheet, inherited from a predecessor, or benchmarked against a competitor whose cost base and strategic position bear no resemblance to the business doing the benchmarking.

And then it is largely left alone — until someone in finance flags a margin problem or someone in sales reports they are losing deals. At which point, the conversation that should have happened at the strategic level becomes a reactive one. And reactive pricing conversations almost always end in the same place: a discount that solves the immediate problem while quietly eroding the commercial foundation of the business.

The cost trap

Most businesses price against cost. They calculate what it takes to produce and deliver, apply a margin that feels defensible, and arrive at a number they can justify internally.

The problem is that it answers the wrong question entirely.

Cost-based pricing tells a business what it needs to charge. It says nothing about what the market will pay, what the customer believes the product is worth, or what the price itself communicates about quality and positioning. It produces numbers that are financially coherent but commercially incomplete — and in competitive markets, commercially incomplete means strategically exposed.

A business that prices against cost will reliably leave margin on the table where its product delivers exceptional value. And it will find itself uncompetitive where a leaner rival has a structural cost advantage and is willing to use it. Neither outcome is the result of a bad product. Both are the result of a pricing approach that never asked the right questions.

What value actually demands

Pricing against value rather than cost begins with a question that is deceptively simple and genuinely difficult to answer: what is this worth to the customer?

Not what it costs to make. Not what a competitor charges for something superficially similar. What specific, demonstrable value does this product deliver — and what is a proportionate price for that value?

Answering this well requires customer intelligence that goes beyond what most sales and marketing functions routinely develop. It requires understanding what problem the product solves, how significant that problem is in the customer's context, and what it currently costs them to live with it. This is not a pricing exercise. It is a customer intelligence exercise — and most businesses have not conducted it with the rigour it demands.

The signal that price sends

Price is not simply the amount at which a transaction occurs. It is a signal. It communicates positioning before any other element of the commercial conversation takes place.

A price set too low in a high-value segment does not attract more customers. It attracts different customers — ones whose primary criterion is cost, whose loyalty is accordingly shallow, and whose lifetime value is structurally limited. It also sends a signal to the market about where the business sits, which is extraordinarily difficult to reverse.

A price consistent with genuine value delivered does the opposite. It qualifies the customer before the conversation begins. It establishes an expectation the business must meet — but meeting it becomes the foundation of a durable commercial relationship rather than a series of transactions held together by the fear of being undercut.

This is why pricing belongs in the boardroom. Not because the numbers are complex, though they often are. But because every pricing decision is simultaneously a brand decision, a positioning decision, and a statement about what kind of business the organisation intends to be.

Discounting is viewed as a strategic failure

The discount that closes a deal in the short term teaches the customer that the original price was not real. It establishes a reference point for every subsequent negotiation. Over time, a business that discounts systematically does not simply reduce its margin on individual transactions — it restructures its entire commercial relationship with the market around a lower price point.

The cost of this is rarely calculated in full. It should be.

The margin that was always there

The businesses that conduct pricing strategy with genuine rigour frequently discover the same thing: the margin was there. The market would have paid more, in more segments, for longer than the business had assumed.

Pricing is not a finance function that happens to affect commercial outcomes. It is a strategic decision that determines what kind of customers the business attracts and what its margin looks like across the full arc of its customer relationships.

That conversation deserves a place at the top table. Most businesses have never put it there.

Price is the clearest signal a business sends about what it believes it is worth. The question is whether that signal is the result of a strategy or of its absence.

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About the Author

Steve Gardiner (exec MBA) is a senior marketing and commercial leader at Lighthouse PR, bringing global experience from Accenture, Electronic Arts, Virgin Media, Telekom, and Etisalat. Latterly, as VP Business at Etisalat, he was responsible for $1.8B in revenue.

Today, Steve applies his strategic, marketing, and growth expertise to support Lighthouse PR clients as part of the agency’s service offering.

About Lighthouse PR

Lighthouse PR is a leading PR agency in Romania that works with a select number of organisations across Central and Southeastern Europe, delivering media relations, reputation management, crisis communications, social media and an extensive range of marketing services — always led by senior practitioners.

We hold exclusive membership for Romania and the Republic of Moldova in both the Eurocom worldwide PR network and the CCNE, Europe's leading crisis communications network.

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