Margins are under pressure everywhere. From global cost volatility and supply chain disruption to rising energy costs, pricing has never been more complex. Yet even the most advanced pricing strategy can break down when it reaches the sales team.
Author Nick Saraev
Photo: Freepik
That was the focus of a keynote by Julie Riccio, Commercial Excellence and Pricing Lead for Europe, and Nicola Woodhart, Pricing and Profitability Director. They shared how industrial gas supplier Air Liquide built a hybrid pricing model designed to align sales and pricing teams while protecting profitability.
The Challenge of Balance
Many companies choose one of two extremes: centralised pricing, where sales have no discretion, or full autonomy, where sales set prices themselves. The first preserves control but risks demotivating sales and disconnecting from field realities. The second ensures customer insight drives decisions, but often results in inconsistent pricing and margin leakage.
Air Liquide instead developed a hybrid model, maintaining control of pricing logic while giving salespeople flexibility within defined guardrails. This “price corridor” approach offers sales teams a negotiation range while ensuring strategic pricing discipline.
A Complex Customer Landscape
Air Liquide serves two million customers across industries such as electronics, healthcare, manufacturing, and beverage production. Needs and willingness to pay vary greatly, from small welders buying a few cylinders per year to multinationals purchasing millions of cubic metres of liquid gas.
Overlay global shocks such as COVID-19, the energy crisis, and raw materials shortages, and pricing becomes even more complicated. Historically, sales teams had significant pricing autonomy, leading to inconsistent outcomes across products and geographies.
Woodhart reflected on her shift from commercial director to pricing by noting that success comes from combining the customer knowledge of sales with the analytical perspective of pricing. “There’s huge value in the knowledge that both of these teams have,” she said.
Step One: Align Incentives
The first step in the hybrid model was to align sales incentives with pricing performance. If salespeople are rewarded only for volume growth, even the most advanced pricing strategy will fail.
Five years ago, Air Liquide restructured incentives around three KPIs: customer retention, margin growth, and new business development. After embedding margin growth directly into sales performance, pricing gained credibility, and adoption improved.
Step Two: Integrate Pricing into Sales Workflow
Julie Riccio highlighted the importance of making pricing guidance part of the existing sales workflow rather than an additional burden. Air Liquide built its own pricing engine that connects to multiple ERP systems and produces target prices and price corridors.
These feed directly into the sales team’s existing tools: Salesforce CPQ for new business and a price campaign tool for recurring accounts.
Pricing is embedded and transparent for salespeople, allowing the pricing teams to track adoption rates, coach individuals where needed, and adjust price guidance based on field feedback.
Step Three: Empower Sales with Guardrails
A single “recommended price” was replaced with a corridor: a lower boundary, a target price, and a best price. Salespeople had the flexibility to negotiate while remaining within defined limits.
Annual price increase campaigns follow the same principle. Each salesperson receives a revenue target for their portfolio and the flexibility to adjust individual accounts, provided they meet their overall goal. Guardrails ensure balanced execution, so increases are not disproportionately pushed onto specific customers.
Training and Transparency
Transparency and training were critical to adoption. Sales teams needed to understand how price recommendations and approval levels were built. When those algorithms were hidden, adoption rates dropped.
Training was rolled out not just for sales but also for pricing teams, ensuring both sides had a shared understanding of methods and goals. Senior sponsorship reinforced the message, with general managers actively communicating the importance of pricing discipline.
Cultural Change and Localisation
Introducing profitability KPIs to sales bonuses was met with resistance, particularly in markets where costs were seen as outside sales’ control. Air Liquide addressed this by creating a dedicated “contribution to profit” metric. It focused only on areas directly influenced by sales, avoiding penalisation for supply chain or energy fluctuations.
Pricing models were also adapted to local contexts rather than imposed globally. Nicola explained: “It can’t be done just at a high level. It has to be relevant to the local context. Some of this is more common sense than revolutionary.”
Measuring Results
Air Liquide tracks adoption across multiple dimensions, including quotation tool usage, adherence to price corridors, and ERP integration. Campaign performance is measured during and after execution, helping pricing teams refine models and identify where additional coaching is needed.
Key Success Factors
Several lessons emerged from Air Liquide’s journey:
- Align sales incentives with margin growth: Without this, pricing intelligence rarely reaches the customer.
- Embed pricing in the sales workflow: Tools must be seamless to ensure adoption.
- Empower sales within guardrails: Flexibility motivates sales teams while still protecting margins.
- Communicate and train continuously: Transparency builds trust and acceptance.
- Adapt locally and remain agile: Models and processes need to fit specific market conditions.
The Outcome
Even with energy deflation impacting costs, Air Liquide has increased margins while improving customer satisfaction. By combining sales’ field knowledge with pricing’s analytical strength and embedding both into one transparent, easy-to-use process, the company has built a framework that balances control and flexibility.
Riccio summarised the approach simply by saying that success depends on finding the right balance. Too much centralisation slows decision-making, but too much autonomy erodes control. Done right, both margin and customer satisfaction can improve.
