Salespeople, operating on little more than intuition, will sometimes quote prices that benefit their client relationships more than the company’s finances. No amount of thoroughly analyzed pricing reports, massive spreadsheets, business intelligence tools or strategic financial goals can override gut-feel pricing.
This isn’t due to some intrinsic flaw in our sales teams — it’s due to misaligned incentives. Pricing teams can’t provide market-aligned, updated pricing for each unique scenario salespeople face, which causes a lack of contextual rationale as to why prices need to change and, more importantly, why the new prices are justified given a complex set of circumstances. So, salespeople shot from the hip, pricing in their own unique way. I have witnessed this problem grow so profound that pricing was referred to in jest as “sales prevention.”