Guest Blog: Dynamic Pricing: Don’t Blame the Algorithm, Blame the People

Guest Author: Stephan Liozu, Ph.D.

Dynamic pricing is one of the most misunderstood concepts in business today. Thanks to headline-grabbing stories of outrageous price hikes and accusations of price gouging, the term itself has become almost synonymous with exploitation. Consumers, politicians, and media alike have been quick to point fingers at algorithms and artificial intelligence, blaming “dynamic pricing” for every questionable pricing decision.

But here’s the reality: Dynamic pricing is not the problem. People are.

Behind every algorithm, there are human decisions. People decide what data goes into the algorithm. People choose what variables it prioritizes. People determine the thresholds for price changes and approve the pricing strategies the algorithm supports. In the end, people hit the “publish” button that makes those prices public. Dynamic pricing is simply a tool, and like any tool, its value and ethics depend entirely on how it’s used.

In the B2B world especially, it’s time to reframe the conversation. Dynamic pricing is not inherently exploitative. In fact, when used responsibly, it’s one of the most effective ways for businesses to align their prices with market realities, ensure fairness across customers, and even improve their bottom line without alienating customers. But for that to happen, business leaders need to take accountability for how pricing decisions are made—and stop hiding behind the algorithms.

What Dynamic Pricing Really Is

Dynamic pricing is a strategy that adjusts prices based on real-time factors like demand, supply, competition, and customer behavior. It’s not new. Airlines and hotels have used it for decades to match prices to changing conditions. Retailers use it to manage inventory and maximize revenue during peak seasons. In the B2B world, it helps companies account for fluctuating costs and tailor prices to different customer segments.

The technology behind dynamic pricing—AI and advanced analytics—has made it faster and more precise than ever. Algorithms can process massive amounts of data, identify patterns, and recommend price changes in ways that manual processes never could. For businesses operating in complex, fast-moving markets, this is a game-changer.

But dynamic pricing is not a self-governing system. It doesn’t decide on its own whether to raise prices during a crisis or charge different customers wildly different rates for the same product. Those decisions come down to how people configure and oversee the system. This distinction matters because blaming the technology obscures the real issue: the need for responsible pricing practices driven by ethical leadership.

The Human Factor in Pricing

Every pricing decision is ultimately a human decision. Even in organizations that rely heavily on dynamic pricing, the system is only as good as the people managing it.

First, people decide what data to feed into the algorithm. In B2B, that might include factors like historical purchase volumes, supply/demand level, geographies, production costs, competitive pricing, and customer-specific terms. If the data is incomplete or biased, the pricing recommendations will be too. Garbage in, garbage out.

Next, people determine the variables the algorithm prioritizes. Should the system focus on maximizing margin? Capturing market share? Managing inventory levels? These choices reflect business goals—and ethical considerations.

Finally, people have the ultimate say in whether to accept, reject, or adjust the system’s recommendations. Dynamic pricing algorithms don’t operate in a vacuum; they provide guidance, and they operate within constraints. The final decision to implement a price always rests with a human being.

When pricing decisions go wrong—when prices spike unfairly during emergencies, for example, or when customers feel they’re being taken advantage of—it’s not because of the technology. It’s because someone made a poor choice, failed to oversee the system properly, or prioritized short-term gains over long-term trust.

Why Dynamic Pricing Gets a Bad Rap

The bad reputation of dynamic pricing stems largely from its misuse in certain high-profile scenarios. Think of airline tickets that double or triple in price during holiday seasons, or ride-sharing services charging exorbitant rates during a storm. These examples make for compelling headlines, but they’re not representative of how dynamic pricing works—or should work—in most contexts, especially in B2B.

In B2B markets, pricing is far more complex and nuanced than it is in consumer-facing industries. Prices often reflect long-term relationships, negotiated contracts, and specific customer needs. Dynamic pricing in B2B isn’t about gouging customers or exploiting market conditions; it’s about ensuring prices reflect real costs, competitive positioning, and customer value.

Yet the perception problem persists, and it’s partly because businesses have failed to communicate how and why they use dynamic pricing. When customers feel blindsided by unexpected price changes, they don’t blame the strategy—they blame the company. And when companies respond by blaming the algorithm, it only reinforces the idea that dynamic pricing is inherently flawed.

The Opportunity for Responsible Dynamic Pricing

In the B2B world, dynamic pricing has the potential to be a force for good. Done right, it helps companies stay competitive in volatile markets, align prices with costs, and deliver fair value to customers. But for that potential to be realized, businesses need to take a more responsible approach.

This starts with transparency and integrity. Customers don’t expect prices to stay static in a world of fluctuating costs and demand, but they do expect clarity. Businesses that explain their pricing practices and provide rationale for price changes will build more trust than those that hide behind algorithms.

Accountability is also critical. Pricing teams and business leaders need to own their decisions, not deflect blame onto the technology. That means monitoring dynamic pricing systems for unintended consequences, setting clear ethical guidelines for their use, and prioritizing customer relationships over short-term gains.

Finally, businesses need to invest in the people behind the pricing. Algorithms are powerful, but they’re no substitute for human judgment. Companies that treat pricing as a strategic capability—building dedicated teams, providing training, and fostering collaboration across functions—will be far better equipped to manage pricing responsibly than those that treat it as an afterthought.

Blame the People, Not the Technology

Dynamic pricing is not the villain in the pricing story. It’s a tool—one that can be used responsibly or recklessly, depending on the choices made by the people in charge. When pricing decisions lead to customer backlash or accusations of gouging, the blame should rest squarely with those who made those decisions, not the algorithm that supported them.

In the B2B world, dynamic pricing is too valuable to dismiss simply because it’s been misused in other contexts. But to harness its full potential, businesses need to take ownership of how it’s implemented and managed. That starts with recognizing that pricing is ultimately a human decision—and one that carries significant responsibility.

Dynamic pricing isn’t the problem. The problem is pretending it operates independently of human choices. It’s time for business leaders to step up, take accountability, and ensure their pricing strategies reflect not just market realities, but also the values and trust their customers expect.

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About the Author

Stephan Liozu, Ph.D. is Chief Value Officer at Zilliant a pricing management and optimization software company. He brings over 20 years of experience in pricing, innovation and value management. A highly accredited expert in the global pricing landscape, he is the accomplished author of over 15 pricing books, including “Pricing—The New CEO Imperative” (2021) and “Value-based Pricing: 12 Lessons to Make Your Transformation Successful” (2024).