Sandvik Mining: making customer value central to global pricing decisions

Connecting engineering value with commercial decisions

For a mining equipment and services business, the commercial conversation extends beyond the purchase price. The relevant question is what the customer needs to achieve in operation, and how the supplier’s complete offer contributes to that outcome.

A technically differentiated product does not automatically command a price premium. Its advantages need to matter to the customer, be understood by the buying team and be supported by evidence.

The Sandvik engagement brought those questions into the executive pricing discussion. The objective was to connect the business’s pricing capabilities with a clearer understanding of customer value, rather than treat pricing as an isolated calculation or a general instruction to increase prices.

Starting with a strategic pricing diagnostic

Pricing Insight used its structured diagnostic approach to examine pricing capability and the commercial practices supporting it. The focus was on how pricing decisions were made, what information informed them and how the organisation could develop a more deliberate approach to revenue and margin improvement.

The diagnostic scope connected several areas:

• Pricing capability: The strategy, analysis, systems, processes and people supporting commercial decisions.
• Customer pricing and revenue: How the business approached customer pricing and the different sources of revenue in its offer.
• Price architecture and agreements: The relationship between prices, rate cards, commercial terms and customer commitments.
• Customer value: The reasons customers choose an offer and the benefits that could justify meaningful differentiation.

This provided a business-specific basis for the executive sessions. The diagnostic and Customer Value Discovery work were connected parts of the program, not separate exercises in analysis and sales training.

Discovering what customers value

Pricing Insight’s Customer Value Discovery approach structured the discussion around the customer’s required outcomes, the alternatives available and the consequences of an offer failing to perform.

In a mining setting, useful questions extend beyond equipment specifications. What does reliable operation mean for the customer’s production schedule? How do parts availability, maintenance support and service responsiveness affect downtime? Where could an apparently lower purchase price create a higher lifetime operating cost or greater exposure to disruption?

These are questions to investigate, not automatic reasons to charge more. A value-based pricing decision requires evidence that the difference matters to the particular customer.

The program’s central principle was to distinguish what a supplier provides from what a customer gains. Product features, commercial support and service capabilities become relevant to pricing when their contribution to the customer’s business is understood.

Working with the global executive leadership team

The Amsterdam sessions brought the diagnostic and Customer Value Discovery program to Sandvik Mining’s global executive leadership team. They connected value-based pricing principles with the commercial decisions leaders needed to consider across their businesses.

The leadership discussion focused on the relationship between customer value, pricing decisions and the capabilities needed to support them. It provided a setting to examine pricing opportunities, challenge assumptions and consider priorities for further action.

The global audience was important. A common method for understanding customer value does not require identical prices or identical commercial offers in every market. It provides a consistent basis for asking why differences exist and whether they reflect customer needs, competitive alternatives and the value being delivered.

A customer-value-led approach to pricing strategy

The contribution of the engagement was to bring diagnostic analysis, customer value and executive pricing decisions into one program. Rather than approaching margin improvement solely through price increases, the work focused attention on the evidence and organisational capabilities needed to support value-based pricing.

For Pricing Insight, the Sandvik Mining engagement demonstrates the application of its diagnostic and Customer Value Discovery approach with a global executive leadership team. It also illustrates a fundamental pricing principle: understanding the customer’s business is essential to deciding how an offer should be positioned, priced and negotiated.

Why this remains relevant

Sandvik’s 2025 Annual Report describes a mining offer spanning drilling, loading and hauling, ground support, rock tools, parts and services, and digital solutions (Sandvik Annual Report 2025, pages 21–23). That breadth illustrates why the value conversation must extend beyond the equipment purchase to the customer’s ongoing operation.

The report also describes solutions intended to reduce operating costs and downtime, improve safety and productivity, and lower total cost of ownership (Sandvik Annual Report 2025, pages 22–23). These later examples reinforce the continuing relevance of the pricing principle at the centre of the Amsterdam program: understand what an offer means to the customer’s business before deciding how to position, price and negotiate it.

About Pricing Insight

Pricing Insight helps leadership teams connect customer value, pricing strategy and commercial execution. Its Strategic Pricing Diagnostic and Customer Value Discovery programs provide a structured basis for examining pricing capability and developing a more informed approach to customer pricing.

Explore our Strategic Pricing Diagnostic or contact Pricing Insight to discuss your business.

By Ron Wood, Pricing Insight. Photography: Sandvik.