
Why Pricing Is a Game-Changer for Product Managers
Pricing is one of the most pivotal decisions product managers can influence. When done right, it unlocks profitability, enhances customer satisfaction, and fosters long-term growth. Done wrong? It’s a missed opportunity.
In a recent episode of Productside Stories, Rina Alexin, CEO of Productside, interviewed Peter Moot, co-founder of Promi and former lead product manager for pricing at Uber and Jet.com. They explored how AI is transforming pricing strategies, why product managers must take ownership of pricing, and actionable ways to leverage data for smarter decisions.
Why Pricing Is the Ultimate Growth Lever
Peter Moot’s career in pricing wasn’t intentional. With a background in economics and early experience at Jet.com, he discovered pricing’s potential as a value-creation tool. At Uber, he witnessed how strategic pricing could shape customer behavior and drive business growth.
“Pricing is a blend of art and science,” Moot explained. “But as organizations scale, it’s the science—testing, iterating, and analyzing—that delivers measurable results.”
For product managers, pricing goes beyond maximizing profits. It’s about understanding customers and aligning a product’s value with their willingness to pay.
How AI Is Transforming Pricing Strategies
Promi, Moot’s latest venture, empowers smaller e-commerce businesses with AI-driven pricing strategies once reserved for giants like Uber.
Here’s how AI works:
- Contextual Data: Factors like time of day, device type, or referral source impact pricing. For instance, a customer typing your URL directly may convert better than one arriving from social media.
- Personal Data: Purchase history and browsing behavior reveal price sensitivity.
- Product Data: AI leverages profit margins, price points, and metadata to recommend optimal pricing strategies.
“AI levels the playing field,” Moot said. “It makes sophisticated pricing accessible to smaller businesses, regardless of their data size.”
Common Pricing Mistakes Companies Make
Moot highlighted three major pricing pitfalls:
- Relying on Intuition: Gut feelings often lead to missed opportunities. Testing and data-backed strategies are essential.
- Over-Discounting Loyal Customers: Rewarding loyal customers with discounts can erode profits. Focus discounts on hesitant buyers instead.
- Static Strategies: Many startups stick with cost-plus pricing and fail to adopt dynamic approaches as they grow.
These mistakes underscore why product managers must remain agile and prioritize experimentation.
B2B vs. B2C: Bridging the Pricing Gap
While personalized pricing is more common in B2C, Moot emphasized its relevance for B2B. Whether segmenting individual customers or organizations, pricing strategies significantly impact revenue.
“Tiered pricing, enterprise discounts, and personalized offers work in B2B too,” Moot said. “The key is understanding buyer profiles.”
Why Product Managers Should Own Pricing
Despite its importance, pricing decisions often fall to strategy or finance teams. Moot believes this is a missed opportunity.
“Product managers are uniquely equipped to lead pricing,” he explained. “They understand the product, the customer, and the data—and they know how to experiment.”
To take ownership of pricing, product managers should:
- Advocate for data-driven pricing decisions.
- Share experiment results to showcase impact.
- Align strategies with overall business goals.
Experimentation: The Foundation of Successful Pricing
Moot and Alexin agreed: Pricing is an ongoing journey. Experimentation is critical—whether fine-tuning existing strategies or implementing bold changes.
For example, Uber saw a 35% efficiency boost with personalized discounts over static pricing. Moot stressed, “The more data you gather, the more confident you become in your decisions.”
The Future of Pricing: AI-Driven and Accessible
AI tools like Promi are making personalized, data-driven pricing the new standard. Product managers who embrace these tools and a culture of experimentation can drive profitability, growth, and customer satisfaction simultaneously.
Key Takeaways for Product Managers
If you’re a product manager preparing to refine your pricing strategy, remember these lessons:
- Start small: Begin with simple models like cost-plus pricing and evolve as you gather data.
- Test and iterate: Don’t fear changes—embrace them as learning opportunities.
- Leverage data: Use even small data sets to inform and refine your strategy.
- Collaborate across teams: Align pricing strategies with input from finance, marketing, and leadership.
Transform Pricing into Your Growth Engine
Pricing isn’t a “set it and forget it” decision. It’s an iterative process that combines data, AI, and experimentation. As a product manager, leading pricing discussions enables you to drive value creation, customer loyalty, and business growth.
By embracing AI tools like Promi, testing dynamic pricing strategies, and collaborating with teams, you can transform pricing into a powerful growth lever for your organization.
- Download our Productside Playbook for templates and tools to optimize your product management process.
- Watch our next webinar to learn more strategies from industry experts.
- Enroll in our Digital Product Management training to master Pricing Strategies.
What are the biggest challenges you’ve faced in pricing decisions? Share your thoughts in the comments or connect with us on LinkedIn.