Niel Chaubal is a seasoned finance and pricing executive with over a decade of leadership experience across Fortune 500 companies and private equity-backed businesses. He specializes in strategic pricing, revenue management, and business intelligence, with a proven record of driving multimillion-dollar growth and profitability. Niel has led pricing and analytics teams at organizations including Cardinal Health, Covetrus, Party City, and Sears, where he built best-in-class pricing frameworks, revenue optimization strategies, and analytics capabilities. Today, as Managing Partner at ProfitQI, he advises industrial and mid-market firms on pricing transformation, revenue management, and AI-enabled analytics.
PART I: This is an excerpt from a long-form discussion between Niel Chaubal & Tim Ouimet.
REVENUE MANAGEMENT
Tim Ouimet: I noticed you included “revenue management” in your bio, and I really appreciated that. It’s a term that doesn’t always get the attention it deserves, and I’d love to start there.
Niel Chaubal: Yeah. In the world of business, revenue management and pricing are often used interchangeably. But if you break it down, revenue management is more about fixed capacity and perishable goods, and it’s closely tied to inventory.
For example, if I’m a manufacturer pricing my products, that would be in the realm of strategic pricing. But if I’m pricing hotel rooms, airline seats, concert tickets, then that falls under revenue management — because the cost is already sunk. You can’t do anything with that unsold hotel room or seat once the night has passed or the event is over.
TO: So, it’s about recovering value from what would otherwise be lost if it goes unused.
NC: Exactly. Revenue Management is about how much more revenue you can generate by selling that room or seat, or hotel room. It is all about selling the right product to the right customer at the right price, at the right time.
TO: Could we also frame it as forecasting over time—getting into yield management?
NC: Yes, exactly. Revenue management is technically yield management rather than just pricing. It revolves around forecasting and inventory allocation. If inventory were infinite, then pricing to maximize margin or profit would be the objective, but once inventory becomes a constraint, then pricing decisions must incorporate optimizing revenue.
TO: That makes sense—it becomes a dynamic challenge rather than a static one.
NC: Correct, in today’s world, prices are no longer static; they tend to change in real-time based on fluctuating supply and demand, competitor prices, and other market factors.
Example retail clearance —like seasonal merchandise. Once Christmas is over, that inventory must move out to make room for the next season. Fast fashion is another example. When spring ends and summer begins—or summer gives way to fall—you’ve got to move that inventory quickly.
Your objective is no longer trying to maximize profit on each unit; you’re trying to clear the inventory in the most optimal way possible, as fast as possible (optimizing sell-through rate), and ideally at the best price and volume combination you can get. That is what revenue management is all about.
OPTIMIZING ACROSS CHANNELS
TO: Optimizing across channels feels like another important dimension of revenue management, especially when you factor in segmentation. Today’s environment includes all these marketplaces, and companies have to make strategic decisions about whether to sell through platforms like Instacart or stick to their own channels.
NC: Definitely. Every channel should have its own go-to-market strategy.
In the retail world, we often think in terms of three main channels: in-store, online, and the app. And yes, I count the app as its own channel, because a lot of consumers today skip going online to the website and go straight to the app to make purchases. You need a strategy that keeps your brand value consistent across those three customer touch channels, but the user experience can differ slightly.
TO: So, you’re saying the touchpoints can vary, but the customer’s perception of the brand should remain cohesive.
NC: Absolutely. Online shopping is often about comparison. I want to see multiple options side by side, compare specs, and maybe compare prices across retailers. That’s a very different mindset from someone shopping in-store, who might want something immediately or is open to impulse purchases. In a physical store, the experience is more human. You might want to talk to someone, get the associates’ advice. This experience is tangible and interactive, which could influence your channel pricing strategy.
With that said, the brand identity, however, needs to stay consistent. You can allow for nuances in pricing across channels. For example, in-store shoppers may be willing to pay a slight premium, especially on non-essential or less price-sensitive items.
So, though channel-specific pricing strategies are important, the brand experience must remain consistent. No matter where customers engage with the product – online, app, or in-store – the brand message, the category presentation, and the tone should feel unified.
In today’s omnichannel world, customers see all channels as part of a single brand experience. Hence, any pricing differences need to be communicated clearly to avoid frustrating customers.
TO: That makes sense. What drives that pricing flexibility?
NC: Online makes it easier to compare prices – consumers can see multiple options with a couple of clicks. On the app, it’s still fairly easy to compare, though maybe less so than on a full website. But once someone is physically in the store, comparing prices gets a bit harder, though consumers can still check online prices on their smartphones.
I am aware that customers today increasingly expect price consistency. When they find a different price for the same item in a store versus online, it can feel deceptive and lead to a lack of trust. This is often the primary reason brands opt for price parity. But, in my opinion, if the price difference is a few percent, say, 2.5% to 3.5%, customers are less likely to walk out and go elsewhere. This gives you a little more flexibility in pricing.
I have often used a “web-exclusive” or “in-app only” deal to drive traffic and justify in-store pricing differences. The challenge is balancing the opportunity for profit optimization with the risk of customer confusion and trust erosion.
So, I recommend using channel-specific promotions rather than permanent price differences. A flash sale on the app, a coupon code for online shoppers, or an in-store-only “buy one, get one” BOGO offer are all effective ways to differentiate pricing across channels.
Finally, there’s a distinction between KVIs – key value items and non-KVIs. KVIs are typically fast-moving items that consumers are sensitive to and tend to know the prices of, e.g., milk, bread, and eggs in the grocery space. For KVIs, I’d recommend keeping prices aligned across in-store, online, and app channels.
But for non-KVIs, the pricing doesn’t necessarily have to be uniform across the channels.
BRAND STRATEGY AND PRICE
TO: One thing I found really compelling was your emphasis on brand strategy and how price plays a role in reinforcing it. Price is empirical—it signals something concrete—and that connection stood out to me.
NC: Right. Always start by analyzing the brand—specifically, the brand attributes. Whether the attributes are functional, like reliability, performance, durability, efficiency, etc., or emotional, like trustworthiness, prestige, status, etc., or social sustainability, ethical sourcing, community involvement, etc.
Example – when I think of a Toyota, I think of reliability, or a Honda might signal durability. But with something like Porsche, you’re not necessarily thinking about durability—you’re thinking about performance, or a Mercedes can be an emotional attribute – prestige or status.
You may shop at Whole Foods because it aligns with your values, like sustainability or ethical sourcing. That social alignment creates a feeling that I’m doing the right thing by shopping at Whole Foods.
The core idea from a business point of view is that if a brand attribute is truly valued by customers, they should be willing to pay a premium for products or services that strongly deliver on that attribute.
TO: So those attributes form the foundation for pricing power?
NC: Exactly. If your brand is strong across any of the dimensions we discussed earlier, it gives you pricing power. And price itself becomes a form of evidence—an indicator that the brand has value. Remember, stronger positive brand attributes allow for higher pricing.
Example – iPhone. It’s likely the highest-priced mainstream smartphone, and yet it maintains demand. Functionally, it’s not significantly different from other smartphones—but its ecosystem, customer service, store experience, and brand equity let it command a brand premium.
With truly powerful or, in most cases, luxury brands, raising the price doesn’t hurt demand; it sometimes increases it. That flips traditional economics on its head.
So yes, price is a signal. Pricing acts as a tangible manifestation of the intangible value of brand attributes. That is why customer segmentation, price elasticity, and willingness to pay (WTP) studies become important so that you can understand which brand attributes matter to your customer and to what extent.
What resonates with me might be completely different from what resonates with someone else.
TO: And that’s where analytics comes in—to tease those differences out.
NC: Exactly. With today’s data capabilities—and especially with advancements in AI—you can gain much deeper insights. I have used conjoint analysis and surveys to understand how customers value different brand attributes and features, and what customers are willing to pay for a product or service with specific brand attributes.
During my time at Sears, we analyzed appliances—refrigerators, washing machines—using historical data and market comparisons. We analyzed pricing and sales data over time, for different models with different features, and then parsed out which features specific customer segments valued most.
Some customers valued color or finish, like stainless steel. Others prioritized an ice | water dispenser or number of doors, ora bottom freezer. Some customers came looking for a specific brand. We identified six different customer segments, each with different preferences.
A note of caution, it’s important to isolate brand from feature – just because a feature carries a premium doesn’t mean it’s the feature alone. It could be the specific brand lifting the feature perception. One has to be precise. First, you need to isolate brand effects, then layer in the feature value. Once you do that, you can determine the perceived value of a product or service for a specific segment and quantify the economic value of the feature.
Once you are able to quantify the value of the specific brand attribute or feature, you can then optimize your pricing strategy accordingly. Remember, you should always price just below the value threshold — so that the customers feel that they are getting value for their money.
TO: I like that. It frames pricing as a value confirmation rather than just a transaction.
NC: Exactly. If I value something at $100, and you sell it to me for $95, that’s a win. I feel like I’m getting more than what I paid for—and that builds trust with the brand.
FORGET WHAT YOU LEARNED IN ECONOMICS—THIS IS RETAIL
TO: That reminds me of when we were first getting into price optimization. We’d talk to retailers about it, and many of them would push back. They’d say, “Forget what you learned in economics—it doesn’t work in retail. It’s too complex.”
That really surprised us. We thought, There has to be a predictable relationship between price and demand—something we can measure and act on. So, when we got our first dataset, we ran the model to optimize pricing for profit.
And the model told us the optimal price for a six-pack of Coke was $8—this was back in 1992. The only thing we knew for sure was that it couldn’t be right.
What we found was that the model was optimizing for short-term profit, not long-term profit. And yes, someone might pay $8 for a six-pack if they’re headed to a party and need it right now, but they’re not coming back to that store again.
So, tying it to what you were saying earlier, it seems like pricing just below the theoretical optimum can be a way of controlling for loyalty—keeping that long-term relationship in view.
NC: Absolutely. Optimizing models need to control for the location. That same $8 might make sense at a convenience store, but not at a Kroger or a typical grocery store. Pricing is contextual; if I’m heading to a party and the convenience store is just down the street, I might grab the six-pack of Coke there and not think twice about the price. But if I’m doing my regular grocery run – something I plan for on the weekend – I’m going to Kroger or Albertsons – where I care about what I pay for.
In an urgent moment, I care more about convenience than price—as long as it’s within reason. But during my planned trips, I absolutely care about price. So yes, price optimizing means understanding those situational differences. It’s not just about the product; it’s about timing, mission, and location.
TO: And that ties back to revenue management. We just talked about segmentation and price positioning—how charging slightly below what the shopper expects can create a positive price perception.
DELIVERING VALUE IN A SUSTAINABLE WAY
TO: So, you’ve got this variability and a mix of margin contributions across products and channels. How do you roll that all back up to know you’re delivering value in a sustainable way?
NC: It all depends on what I call the “objective function” – a term we use in operations research. We have to ask ourselves: what’s the goal here? Is it to maximize profit? Grow market share, aka sales? Drive volume in terms of units. These are all distinct objective functions. And I’ll tell you why that matters.
At PCHI, we had different objective functions by category. I told my team, “Yes, we want to make more money overall, but we have to be strategic about how.”
In retail, if you want to grow gross margin, the fastest way is usually to raise prices—not cut them. Because even if dropping prices lifts volume, that lift often isn’t high enough to make up for the margin loss on each unit.
That’s not just theoretical. In my experience, traffic limitations or market saturation mean that volume gains often fall short. So, if you’re trying to increase profit, raising prices works much better – but again, only up to a point.
In a different retail engagement, the ELT directive was to increase profit. So, we raised prices, and yes, margins improved — but sales declined. I cautioned them that if you keep repeating this cycle, you will end up in a downward spiral.
That’s why being clear about the objective function is so important. At PCHI, we classified categories with different roles and intent: Some were margin drivers, where we raised prices. Others were revenue drivers, where we held price to move volume. KVIs and core items were traffic drivers, where profitability wasn’t the focus—they were priced to drive traffic and draw customers in.
TO: So, you’re intentionally assigning roles to each category based on what you want it to achieve, instead of chasing profit everywhere.
NC: Exactly. This is where the role and intent framework comes in handy, e.g., if the category is assigned as a revenue driver (me-too products), you should typically price at or below the market; if the category is assigned as a margin driver (products with differentiation), you should be pricing at a premium to market.
I have assigned categories as traffic drivers, convenience drivers, or impulse drivers, which helps to price them in a distinct way. The point is that you should not expect every category to drive profit. The goal should be to hit a blended outcome: maybe 100 to 200 basis points of overall margin improvement while maintaining—or growing—revenue. That’s how you define a healthy pricing strategy. It has to be specific to the category and product portfolio.
TO: That makes sense. And if a product is more of a commodity—or as you put it, a “me-too” item—you’re not going to gain anything by raising the price.
NC: Exactly. You can’t raise prices on products that everyone else sells for the same price. There is no product differentiation. But if you have a unique product, or as I call it, a destination item, something customers come to your store or site specifically for, then you can charge a premium. Everything else needs to be at market-relevant pricing or priced a little below the market to drive traffic.
A note of caution here – lowering prices unnecessarily and expecting that the lower prices are going to drive a substantial increase in demand is highly misleading. My most recent experience showed that lowering prices for top-selling products resulted in an expected increase in demand, but not sufficient enough to increase revenues, and in almost all cases, eroded much-needed profits. This is typical of the brick-and-mortar world of retail, as there is not enough availability of demand. You need an adequate pool of customers available to support the requisite incremental demand. Yes, demand does go up, but only by a modest or lower percentage than expected, and this increase in demand is not enough to justify the drop in prices and resulting in the business giving up much-needed profit dollars.
PRICE PERCEPTION
TO: Have you ever experienced a situation where you think you may have pushed it too far? Maybe sales declined, or you had to back off and do some repair work?
NC: Yeah, we did that. In the retail scenario that I mentioned earlier, we made some good profit by strategically raising prices, but then we had to pull back. What we found was that when you raise prices, demand doesn’t immediately respond. There’s a lag. Customers tend to buy at the higher prices first, especially in stores. It’s very different than online. So, you get an artificial spike in profit because the customer hasn’t yet adjusted his | her purchasing behavior.
In my experience, whether the price goes up or down doesn’t initially matter. The regular customers notice that the price has changed, not necessarily whether it went up or down. I’ve run experiments this prove this hypothesis. Eventually, after a few days or a week at most, they realize that the prices have gone up, and demand declines quickly. So, we’ve had to roll back prices and course correct.
That’s why I always advise caution. Yes, you can take prices up, and you’ll see a short-term lift in profits. But in the long term, it will hurt the business. Once customers perceive you as a higher-priced retailer, that perception is incredibly difficult to undo. It can take a year or even more just to shift customer price perception by one point.
TO: Talk more about that. That’s super interesting.
NC: At PCHI, we surveyed customers, conducted focus groups, and gained deep customer insights. We even ran press releases directly from the CEO announcing price drops on 2,000 core items. And while customers noticed, the change in customer price perception was minimal— maybe 50 to 75 basis points, over the next six months.
Other professionals in the retail industry have told me it can take up to two years to change customer price perception, that is for customers to accept that you’re now a value-based company. But all this takes a lot of time and effort. And in many cases, businesses do not have the luxury of time. They may be gone before the price perception shifts.
TO: Yeah, that lines up with what I’ve heard. I remember Willard Bishop had studies showing it took about 18 months on average to repair a damaged price image.
NC: Exactly. That’s why you have to be really thoughtful and careful which prices you take up, and which ones you bring down.
PRICING PSYCHOLOGY
TO: Would you say that kind of thinking is part of revenue management? Factoring in long-term effects?
NC: Absolutely. Everything we’ve been talking about is a subset of revenue management.
Remember, pricing intersects multiple domains – psychology, big data, analytics, LLMs, cross-functional teams, cross-industry collaborations, and data. Which is why I consider it the Art and Science of Pricing.
As a pricing leader, you do not need to be an expert in psychology, but you should understand the basic principles of pricing psychology. We’ve talked for years about the power of 9, that is, ending a price with nine or ninety-nine.
Examples, presenting a higher price first can make a subsequent lower price seem more attractive or presenting a price as avoiding a loss can be more effective than showing a gain.
Even the way a price is presented, known as price framing, can impact perceived affordability, take insurance companies: they don’t say $300 a month—they say $9.95 a day. The total is the same, but the way you message it makes all the difference. That’s pricing psychology.
I’ve run multiple studies; at Sears, I split stores into three distinct but similar groups. One store priced something at $100, then slashed it to $50. Another store showed $100, then marked it as 50% off. The third store listed the same item at $100, with the message “Buy One Get One Free”. Same effective deal, right?
But the results were very different. The first store had the lowest sales lift. The 50% off group performed better than the 1st. And the BOGO group? It had the highest sales. I later ran the same experiment at another retailer and saw exactly the same pattern.
It’s the same net price, but price framing or messaging changes customer responses dramatically. That’s why pricing psychology matters so much.
Then of course, you’ve got analytics. I consider data analytics as table stakes at this point. I call this the “math” or science of pricing.
TO: That’s a powerful illustration of how pricing isn’t just math—it’s perception. And yet, even with the right framing or psychological tactics, things can still go sideways if the pricing team isn’t in sync with the rest of the business. What other skills do you think a pricing leader needs to be effective?
Click here to read Part II.
