Worksheet: Write down who pays what, and why

Customers pay different prices in every business. This sheet makes the differences deliberate, writes a reason for each, and names the fence that holds them apart. It builds the Competent step of the check:

Prices vary by defined customer segment with a written rationale for the differences.

Step 1. How customers are grouped today

Group used for pricing today	Based on (channel, product, size, needs)	How a customer gets in	Price level against list	Written reason today

Channel labels are the usual start. Needs and buying behaviour make better segments, because they explain what a customer will pay for.

Step 2. Three to five segments

Segment	Who is in it (a test a new hire could apply)	What they value most	Price position	Written rationale
e.g. Project buyers	Orders over 20 tonnes to one site	Price certainty over lead time	List less 8%	Full-truck drops cut our cost; importers compete here

Step 3. The fences

A fence stops a customer or a product slipping into a cheaper segment. Typical fences: order size, delivery speed, service level, contract length, payment terms, product version.

Fence	Segments it separates	What stops a customer crossing	Who checks	Leaks found last quarter
e.g. Minimum drop for the project price	Project and trade	Price applies only above 20 tonnes a drop	Credit team	3 accounts splitting orders

Done when: every customer sits in one defined segment, each segment's price difference has a written reason, and each fence has someone checking it.

Adapted from our own pricing self-assessment (PSP, 2004).