Move Pricing Out of the Silo and into the Planning Rhythm
Poorly coordinated pricing decisions can dramatically undermine margin and planning. Forward-looking organisations are embedding pricing into cross-functional rhythms to support sharper decision-making and stronger operational and financial outcomes.
It’s official: margin has left the spreadsheet.
Once upon a time, pricing sat neatly in a commercial function, as the domain of product owners and sales leads. Meanwhile, finance might be called in to check the margin after the fact, or supply chain teams would scramble to meet unexpected volume shifts. Pricing was treated tactically rather than strategically; and it definitely wasn’t seen as something that required cross-functional coordination. It certainly wasn’t part of the operational rhythm.
That model no longer works. In today’s environment, where tariff shocks, inflationary pressures and market volatility collide with rising return rates and customer churn risk, pricing has become a test of planning maturity. What used to be a commercial lever is now a whole-of-business capability.
Unfortunately, many organisations aren’t ready for that change.
The cost of disconnection
Disconnected pricing decisions create a cascade effect. A classic example is a promotion locked in by the commercial team, which triggers a surge in demand that the supply chain isn’t resourced to fulfil. That gap often results in expensive workarounds.
We can point to more than one instance where the cost of delivering the promotion – through air freight, overtime, or stock reallocation – ended up outweighing the benefits. Meanwhile, finance is left adjusting forecasts mid-cycle, trying to understand why the margin model is suddenly falling short. Pricing may have driven top-line demand, but the hidden cost to fulfilment and margin made it a loss-making decision overall.
Another hidden danger is the outdated assumption that a price cut will drive demand in predictable ways. But in practice, price sensitivity is far more complex; it’s shaped across categories in nuanced ways by unpredictable variables including customer behaviour. Without coordination across planning and execution, the financial and operational consequences are difficult to control.
A key point to take away here is that most businesses don’t lack the data to uplift pricing to a strategic level – what they lack is the capability to model and adjust it within their planning cycles.
From static pricing to scenario planning
To meet these challenges, more organisations are beginning to replace static mark-ups and reactive price changes with forward-looking pricing approaches. Some are testing pricing sensitivity using internal data, while others are using AI-enabled models to test for volume risks or operational pressure before locking in decisions. The ones seeing the greatest impact are doing this alongside finance and supply chain, not in isolation.
When pricing becomes part of the integrated planning rhythm, its role evolves from reactive adjustment to active planning input. Finance can model the cashflow and margin impact of proposed scenarios before decisions are made; while supply chain can assess fulfilment constraints and inventory pressure in advance.
Meanwhile, commercial and sales teams gain a more accurate view of cost-to-serve and customer value, helping them shape offers that can be delivered without compromising operational or financial outcomes.
A shared responsibility
In many of the organisations we’ve worked with, pricing issues are often a symptom of something deeper. They tend to appear when coordination between critical functions, including finance, supply chain and commercial teams, breaks down.
When assumptions aren’t shared and planning isn’t integrated, the effects quickly show up in missed forecasts and avoidable fulfillment costs – and ultimately, unplanned margin erosion. The businesses that manage to avoid these pitfalls tend to combine a consistent planning rhythm to support cross-functional visibility, as well as the right tools to support price scenario modelling and demand sensitivity analysis.
That doesn’t mean pricing needs to be owned by finance, or by supply chain. Rather, it needs to be understood as a shared responsibility. When margin protection becomes everyone’s job, pricing evolves from a tactical decision to something more foundational. From a finance perspective, that means treating pricing as a financial planning input with implications for forecasting and cashflow. For supply chain, it means working with earlier signals to ensure execution is viable, not just reactive.
How are businesses making pricing work across functions?
If you’re looking for practical examples of how businesses are making pricing work across functions – including a 3.1% increase in margin for one U.K. retailer – a recent conversation between Dr Deborah Pike, Brent Gorham and Tools Group Fabrizio Fantini is worth watching on demand.
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