During their turnaround, Campaigns & Elections stopped offering discounts and freebies, even if it meant losing immediate cash. This difficult short-term decision was crucial for resetting market expectations. When clients eventually returned, they did so at the new, non-negotiable price, rebuilding long-term pricing power.
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Founders often feel guilty about raising prices. Reframe this: sustainable profit margins are what allow your business to survive and continue serving customers. Without profitability, the business fails and everyone loses. It's a matter of ensuring longevity, not greed.
When you easily concede on seemingly small items like payment terms, you inadvertently tell the customer that your pricing isn't firm. This encourages them to push for more discounts, slowing down the deal. Instead, trade every concession for something of value to your business.
Customers don't care about your P&L or that a competitor is a "side hustle." To justify a higher price, you must clearly communicate tangible benefits like better organization, time savings, or superior staff, which directly improve their experience.
The media company Campaigns & Elections found that constantly extending deadlines for awards or early-bird pricing sent a signal of weakness to the market. This practice trained clients to ignore deadlines and pressure them for discounts, eroding the brand's pricing power and perceived value over time.
In recurring business relationships, winning every last penny is a short-sighted victory. Intentionally allowing the other party to feel they received good value builds goodwill and a positive reputation, leading to better and more frequent opportunities in the future. It inoculates you against being price-gouged upfront.
Instead of setting prices at launch and letting them erode, Novonesis implemented a discipline of having annual conversations about the value their products deliver. This shifted pricing from a 1-2% annual erosion to a 1-2% revenue growth contributor.
When pressured to hit quarterly targets with promotions, use a simple filter: 'Does this action increase the long-term desirability of my full-price product?' This framework helps balance immediate revenue needs with the crucial goal of protecting and building brand equity, preventing a downward spiral of discounting.
When negotiating a price increase, if the customer accepts immediately without pushback, it’s a strong signal you've significantly underpriced your product. Buildots' founder prepared for a negotiation over a 4x price increase, but the client agreed instantly, revealing the product's true value.
While intended to drive sales, frequent discounting damages brand perception by training consumers to see the brand as low-value. This creates a "deselection barrier" where they won't consider it at full price, eroding long-term brand equity for short-term gains.
Price sensitivity decreases when customers have absolute clarity on what they're buying, when technicians present options with confidence, and when the business consistently provides multiple choices. These three "C's" build perceived value, allowing for higher prices.
