In this topic, learn about price types and their characteristics, pricing approach value, and potential issues.
Four core price types—list, matrix, agreement, and override—form the foundation of B2B pricing. Each price type plays a different role in managing pricing complexity, addressing the reality of differentiated value across customers, regions, and markets.
The core price types combine to form a structured pricing approach.
List prices are the broadest reference point across all customers and segments.
Matrix prices differentiate by segmenting customers and products to reflect value differences.
Agreements go further by negotiating product prices and terms for a specific customer.
Overrides are the most specific, offering a one-time adjustment for a single order.
Agreements and overrides don’t always flow cleanly from upstream list or matrix prices. In practice, they may be be set independently, and their rules and restrictions aren’t always visible.
List price
A list price is a single reference price for a product.
Also called | Characteristics | Value | Common issues |
|---|
Manufacturer’s price Catalog price Reference price Global list price Public price Published price
| Typically set by product management or a pricing team. Most often appears in price lists, catalogs, or internal systems. Serves as the baseline starting point for other price types: matrix, agreement, and override.
| Provides a transparent, standard reference inside your organization. Establishes a competitive positioning statement outside your organization. (Am I the premium provider? The low-priced provider?) Establishes a baseline that you can adjust for customers, regions, or deals. Anchors pricing discussions and maintains consistency. Less commonly used to price order-lines directly, although smaller customers may be quoted at list price.
| Misaligned. May fail to keep up with costs, competitors, or customer needs. Artificially inflated. Higher numbers enable “big discounts,” which erodes credibility Not relevant as a transaction price. For many industries, list price is purely a reference. Too complex. Multiple lists across products or regions make updates difficult.
|
Matrix price
A matrix price is a differentiated price, set in advance for groups or segments of customers, products, or orders.
Also called | Characteristics | Value | Common issues |
|---|
Column price Program price Segmented price Group price lists Schedule price Price plan Local market price Standard price
| Prices vary by attributes or dimensions such as region, customer size or product category. Set in advance, typically by the pricing team. Typically not established through negotiations with customers.
| Provides a structured way to segment customers and offer them differentiated pricing, without the burden of negotiating. Ensures similar customers receive consistent pricing, reducing reliance on ad hoc discounts. Helps pricing stay aligned with the market with less effort than creating and updating negotiated prices.
| Stale or generic. If not properly differentiated and updated regularly, matrices stop reflecting market conditions. As a result, customers push for individual price negotiations. Misaligned assignments. Customers may end up in the wrong part of the matrix. This causes lost margin or unhappy customers. Bypassed by sales. If the sales organization thinks the matrix is out of touch, they push for overrides.
|
Agreement price
An agreement price is a customer-specific, negotiated price that is documented and applied across specific products or categories.
Also called | Characteristics | Value | Common issues |
|---|
| Negotiated between seller and customer. Recorded in order systems so that future transactions automatically reflect the negotiated price. Is not an enforceable legal contract for seller or customer.
| Provides price stability and predictability for priority customers; provides volume stability and predictability for sellers. Strengthens customer relationships by honoring negotiated terms over time. Ensures agreements stay current by using effective dates that require review or renewal.
| Inconsistency. Similar customers may end up with very different agreement prices. Stale prices. Agreements may never expire and price updates are skipped. Eventually, this leaves prices below minimum margins or even current costs. Administrative burden. Managing price updates to hundreds or thousands of agreements takes significant time and effort.
|
Override
An override is an order-level price adjustment, typically made at the point of sale.
Also called | Characteristics | Value | Common issues |
|---|
Spot discount Order-level discount Exception price Project price Price match One-time quote
| Unlike agreements, which are negotiated in advance, overrides are negotiated in the moment. Apply only to a single order. Overrides do not apply to future transactions.
| Provides sales organizations the flexibility to respond to competitor pricing or special situations that aren’t well represented by in-place matrix or agreement prices. Allows deals to close when standard price types don’t fit the situation. Mitigates loss of business by enabling price negotiation.
| Margin erosion. Overrides often over-discount a price to win a deal, which reduces profitability. Inconsistent. Similar customers may receive different overrides. Limited control. Overrides are often made locally without visibility. This makes them harder to track or align with company strategy. Approval bottlenecks. Manual review of override price requests leads to longer quote response times, ultimately resulting in lost deals.
|