Pricing Strategy Glossary

The terms PE operating partners and finance leaders actually use when diagnosing pricing health, building deal logic, and designing packaging architecture — defined by practitioners who have built these systems inside portfolio companies.

• Pricing Power — The ability to raise prices without proportional volume loss
• Price Realization — The percentage of list price actually captured in closed deals
• Value-Based Pricing — Setting prices based on quantified customer value rather than cost or competition
• Usage-Based Pricing — Pricing tied to consumption metrics rather than flat subscription fees
• Discount Governance — The rules, approvals, and guardrails that control who can discount and by how much
• Price Elasticity — The sensitivity of demand to changes in price
• Margin Erosion — The gradual decline of realized margin over time through structural or behavioral causes
• Pricing Architecture — The full structural design of how a company packages, tiers, and prices its offerings