The adoption of pricing from an organizational perspective and its impact on relative firm performance

Over the past decade, more firms are adopting best practices, methods, and systems related to pricing. There is increasing evidence of pricing as a powerful lever and driver of financial performance. Despite this good progress, pricing as a function lags behind other functions, and many firms struggles to improve the adoption of pricing tools, methods, and systems. We survey 540 business and pricing professionals with the support of the Professional Pricing Society to investigate the influence of four organizational factors on the adoption of pricing as well as the impact of increased pricing adoption to relative firm performance. Our results highlight the positive influence of organizational alignment, cross-functional collaboration, and top championing support on the adoption of pricing. They also reveal that too much formalization in the pricing process negatively influences adoption. Finally, we find that the greater the adoption of pricing, the greater the relative firm performance.