A Pricing Strategy That’s Good for Businesses and Good for Society
Pricing discussions can feel like an endless technical exercise, divorced from a larger strategy. There are dozens of theories, concepts, frameworks, and equations to choose from and little clarity about how to make sense of it all. Worse, many leaders assess these options based on faulty assumptions: thinking that pricing is a zero-sum game or that there is one “right” price for every transaction.
Amid all the confusion, companies have huge opportunities to expand the pie—both for themselves and their customers.
Pricing is powerful. The right strategy can maximize value creation, deepen customer relationships, reshape businesses—and benefit society.
BCG’s new book, Game Changer: How Strategic Pricing Shapes Business, Markets, and Society, distills decades of client work and research into a unified theory of pricing. Coauthored by BCG’s Jean-Manuel Izaret and Arnab Sinha, it provides a clear playbook for leaders—helping them unlock strategic pricing decisions with greater speed, efficiency, and impact.
The Strategic Pricing Hexagon
The core of the theory is the Strategic Pricing Hexagon (The Hex). The Hex integrates multiple elements—business intelligence, economic frameworks, market characteristics, market forces, and organizational authority—into seven pricing games.
The term “game” may seem curious, but it’s apt. All games have their own unique set of rules and ways to win. Similarly, each of the seven games in the Strategic Pricing Hexagon represents a unique pricing approach:
Recommended by LinkedIn
Most markets fit very well to one of the games, but some may fit to more than one game. This is not a flaw but rather an opportunity: leaders can decide which game to play depending on their competitive advantages.
More Than the Bottom Line
A strategic approach to pricing can generate real benefits for companies through more consistent and reliable pricing decisions and increased revenue over the long term. But there are societal benefits as well.
Fairer and more equitable pricing can generate benefits for companies—and for society overall.
For example, fairer and more equitable pricing can make health care more accessible. These same concepts can apply to other economic factors, such as wages and salaries—potentially reducing income disparities. Some companies that sell sustainability products and services can use pricing to boost adoption, leading to environmental benefits. Nonprofits often shy away from the concept of pricing, but smart pricing can actually optimize access, consumption, and performance, leading to greater social impact.
In this way, thinking more strategically about pricing can boost the bottom line for companies—and for societies overall.
More of our latest thinking on pricing:
____
Subscribe to The Game Changer Newsletter on LinkedIn here
--
1yThanks for posting
Founder @ Peak Performance Strategies | Private Equity
1yA new way to look at pricing based on time-tested concepts. At the end of the day, the goal is to explore the maximum pricing levels that the market will bear. Unless there is a strategic decision to be a loss leader to capture market share or the company operates in a monopolistic environment. #strategicfinance
Indian , Engineer , Production and Operations Management Professional
1y#Reading, a lot of information, a lot of learning.