Any advice for conducting a pricing audit? Our pricing has gotten complicated with many SKUs and custom deals over time — how can we simplify and standardize our pricing without losing revenue?

Conducting a pricing audit is an essential step to regain clarity and control over a complex pricing structure. Here’s a concise approach based on the principles discussed in our pricing strategy book, Price to Scale:

Establish a Centralized Pricing Function
• Create a dedicated pricing or monetization team that takes ownership of all pricing decisions. This centralization helps coordinate across departments (as mentioned in Price to Scale, page 109) and ensures consistency in your pricing approach.
Audit Your SKUs and Custom Deals
• Review historical data for each SKU and custom deal. Identify which pricing models and packages are generating the most value versus those that add unnecessary complexity.
• Assess profitability and customer behavior for each deal type. This helps highlight areas where standardization may lead to incremental revenue gains or enhanced efficiency.
Simplify with Structured Pricing Frameworks
• Consider frameworks like the Good-Better-Best model (outlined in Price to Scale, page 29), which groups features and capabilities into standardized packages. This tactic can simplify your offerings while still catering to different customer segments.
• Alternatively, explore modular pricing where distinct value components are clearly defined and priced individually. This can reduce customization overhead without sacrificing revenue potential.
Leverage Pricing Calculators and Tools
• As recommended in Price to Scale (page 109), build a pricing calculator (using tools like Excel or Google Docs) to simulate various pricing scenarios. This tool allows your teams to quickly test adjustments and understand the impact on revenue.
• Regularly update this tool to reflect market changes, ensuring that your pricing stays competitive and aligned with growth objectives.
Define Clear Pricing Governance and Strategy
• Set clear guidelines on how new deals and SKUs get integrated into your pricing model. This governance prevents complexity from reaccumulating over time.
• Develop a process for regular reviews and adjustments, ensuring that any deviations from standard pricing are deliberate and backed by data.

In summary, a successful pricing audit combines centralized oversight, detailed data review, structured pricing frameworks, and effective modeling tools to simplify and standardize your pricing without sacrificing revenue. This strategic approach, as discussed in Price to Scale, ensures that your pricing remains agile and aligned with both market demands and internal operational efficiency.