13 Nov 25
RevOps is no longer supporting execution, it’s orchestrating it. Key insights from SBI’s Q4 2025 RevOps Roundtable.
Pricing has become an increasingly prevalent topic among our clients and one of the
highest-priority items for operators seeking to maximize enterprise value. Similar to the renewed focus on Net Revenue Retention (NRR) discussed in our previous PE Insights piece, the growing attention on pricing stems from the same market dynamics—slowing growth rates, tightening margins, and a broader search for new avenues of value creation.
As top-line expansion becomes harder to achieve, how well sellers defend price has
emerged as one of the clearest indicators of commercial maturity—and a quantifiable way to drive productivity, profitability, and growth across both new and existing customers.
“As part of a portfolio-wide pricing mandate, we recently reviewed one company and found what we could only describe as a ‘rat’s nest’—inconsistent discounting, outdated list structures, and unclear value messaging. We believe this issue is far more common across the portfolio, which is why we’re leveraging AI-driven tools and behavioral data to pinpoint where breakdowns are happening instead of relying on traditional pricing audits.
— Operating Partner, $55B+ AUM PE Firm
That sentiment has been echoed across the market. Pricing leakage—whether through inconsistent discounting, legacy models, or weak governance—is surfacing as one of the most under-addressed value creation challenges in PE-backed companies.
In this month’s edition of PE Insights, we examine what’s driving price realization
performance and how operators are finding the balance between growth and margin.
Defining Price Realization
Price realization—realized (pocket) price divided by list—remains one of the simplest ways to measure commercial discipline, even if rebates, deferrals, and incentives distort it at the margins. The more important signal is what drives it: seller behavior.
The Data: Discount Discipline as a Growth Driver
SBI’s latest research, drawn from SBI’s 2025 State of SaaS Pricing Report, Part I & Part II, found that discounting discipline—keeping average discounts below 25%—is consistently linked to stronger growth outcomes in SaaS across market segments:
Across all ARR bands, companies maintaining average discounts of 25% or less off list achieved the highest last-twelve-month (LTM) ARR growth rates. The finding holds from $50M businesses through those exceeding $5B in annual recurring revenue.
In contrast, companies allowing average discounts above 25%, consistently
underperformed their peers—indicating that excessive discounting erodes not only
margins, but top-line growth as well.
Why Price Realization Erodes
In analyzing where price realization breaks down, we see several consistent themes:
- Misaligned value messaging: Selling on product features rather than customer
outcomes. - Outdated price management: List prices not aligned with market demand or
willingness to pay. - Packaging and monetization gaps: Price structures that don’t match perceived
customer value. - Weak governance: Inconsistent approval processes or lack of deal-desk oversight
Each of these reflects a breakdown not just in pricing strategy, but in commercial execution.
Behavioral Insights from AI and Sales Data:
In recent projects, we’ve seen teams analyze thousands of sales interactions using
technologies such as Gong and integrate those insights into SBI Wayforge™ for portfolio -wide visibility. Across these analyses, discounts most often appear late in the deal cycle—typically during proposal or negotiation stages—and roughly two-thirds of the time are triggered by competitor mentions or budget pushback.
Discounters tend to have shorter tenure and more transactional sales backgrounds, while non-discounters rely on consultative, ROI-based selling and consistently achieve higher realized pricing.
Why It Matters Now
Discounting kills margins, while pricing discipline expands them without incremental cost. With growth slowing and capital markets emphasizing efficient, durable expansion, price realization has become a direct lever for EBITDA improvement.
As the cost of new logo acquisition continues to climb, defending realized price in renewals and expansions has a disproportionate impact on valuation. Sponsors who can measure and manage realized price at the seller level are seeing higher EBITDA conversion, faster payback, and reduced reliance on headcount growth to hit plan.
Execution in Practice
Improving price realization starts with visibility and enablement. We’ve seen portfolio
companies combine structured sales training with data-backed insights to make pricing discipline measurable and actionable.
By analyzing sales data through technologies such as Gong, teams can identify when
discounts are introduced, how objections are handled, and which talk tracks correlate with higher realized prices. When integrated into diagnostic tools like SBI Wayforge™, these insights help visualize discount frequency, timing, and realized price by seller—turning pricing behavior into something observable and coachable.
Common interventions include:
- Reinforcing start–target–floor pricing guardrails.
- Embedding ROI calculators into the proposal process.
- Building talk-track libraries that model how to handle price objections.
- Implementing lightweight deal-desk oversight to ensure consistency.
Organizations that adopt this approach typically see a 5–10% lift in realized price within months—without changing list prices or compensation structures.
Takeaway for PE Sponsors:
Pricing discipline is one of the most direct, cost-neutral ways to enhance enterprise value. Sponsors who invest in understanding and shaping seller-level pricing behavior are achieving outsized results across their portfolios—balancing growth with efficiency and building pricing resilience into their commercial models.
