---
id: ins_simon-formal-pricing-process
operator: Hermann Simon
operator_role: Founder Simon-Kucher & Partners; pricing pioneer; author Confessions of the Pricing Man, Hidden Champions
source_url: https://www.simon-kucher.com/
source_type: book
source_title: "Confessions of the Pricing Man — Pricing Process"
source_date: 2015-10-23
captured_date: 2026-05-05
domain: [strategy, leadership, gtm]
lifecycle: [pricing-packaging, organisational-design]
maturity: applied
artifact_class: playbook
score: { originality: 3, specificity: 4, evidence: 4, transferability: 4, source: 5 }
tier: B
related: [ins_simon-pricing-is-structural-org-failure, ins_simon-discounting-most-dangerous-practice]
raw_ref: raw/expert-content/experts/hermann-simon.md
---

# Pricing needs a four-phase process and a named owner, strategy, analysis, decision, implementation

## Claim
Companies need a formal pricing process with four phases (strategy, analysis, decision, implementation), a pricing function (full department or at minimum a "Pricing Officer" who facilitates the process and maintains pricing intelligence), and CEO involvement in pricing strategy at least quarterly. Without these, pricing is ad hoc and reactive, and the structural under-investment per the related card becomes the operating reality.

## Mechanism
Each phase requires a different kind of work and a different kind of input:

- **Strategy.** What positioning are we pricing for? Premium / mid / penetration? Which segments? What value capture rate?
- **Analysis.** Customer WTP research, competitor pricing intelligence, segment elasticity studies, cost models.
- **Decision.** Tier structure, list prices, discount bands, feature gating, fences against arbitrage.
- **Implementation.** Pricing pages, sales-system enforcement, comp plans, training, communication.

Without the process, pricing decisions get made in three default places: by sales reps closing deals (tactical, with no strategic context), by finance teams under quarterly profit pressure (decisions optimised for the quarter, not the year), and by product teams adding features without pricing implications. The Pricing Officer's role is to own the process and to maintain pricing intelligence as a living asset, not a one-time consulting deliverable.

## Conditions
Holds when:
- Company has multiple products or customer segments where pricing decisions are non-trivial.
- Leadership is willing to fund a Pricing Officer role and quarterly CEO time.
- The team can sustain the process discipline through quarterly sales pressure.

Fails when:
- Very small companies where the CEO is the de facto Pricing Officer by default.
- Highly regulated industries where prices are fixed and the process is moot.
- Cultures that resist process introduction; the Pricing Officer becomes a token role with no authority.

## Evidence
> "companies need a formal pricing process with four phases (strategy, analysis, decision, implementation), a pricing function (even if not a full department, at minimum a \"Pricing Officer\" who facilitates the process and maintains pricing intelligence), and CEO involvement in pricing strategy at least quarterly."

· see `raw/expert-content/experts/hermann-simon.md` line 15.

## Signals
- A named Pricing Officer at director level or higher with cross-functional authority.
- Quarterly pricing reviews on the CEO calendar with explicit decision artefacts.
- Pricing intelligence (competitor data, WTP studies, segment elasticity) maintained as a living document, not as one-time reports.

## Counter-evidence
For early-stage companies still finding product-market fit, premature process-build-out is over-engineering and slows iteration. The four-phase process is most operative once the company has a stable motion and multiple segments, typically post-Series A scale.

## Cross-references
- `ins_simon-pricing-is-structural-org-failure`, the diagnosis this process is meant to address.
- `ins_simon-discounting-most-dangerous-practice`, the daily failure mode the process prevents.
- `ins_simon-single-price-always-suboptimal`, what the analysis and decision phases produce.