This is a straightforward yet important message: Raising Prices Isn’t a Growth Strategy. Especially during periods of slowed growth.
Why is this the case? Sure, it might provide a boost for the current quarter or even the year, but it rarely attracts more customers.
When start-ups and scale-ups face difficulties, the first instinct is often to raise prices, as it doesn’t require improvements in sales or marketing nor addressing any feature gaps.
This approach often appears as a desperate measure in about 80% of cases. I frequently observe this pattern: a struggling CRO running out of solutions and resorting to continuous price hikes.
I support strategic, annual pricing reviews and real-time adjustments based on new feature launches and the insights gained from them.
However, if raising prices is your team’s primary solution to slowing growth, it indicates a team problem.
The true solution to overcoming a challenging period is to acquire more new customers.
Not by extracting more revenue from existing ones. While this approach may be appropriate in certain situations, it shouldn’t be considered a strategy.
Don’t allow your team to bypass accountability for missing plans through price increases. Above all, don’t excuse yourself either.