Ok this is a simple post, but I think an important one: Raising Prices Isn’t a Growth Strategy. Especially when growth slows.
Why not? Well, sure maybe it gives you a boost this quarter or even this year. But with very few exceptions, it doesn’t get you more customers.
My top concern when I see start-ups and scale-ups hit a rough patch, idea #1 is to raise prices. After all, it doesn’t require doing any better in sales or marketing. Or closing any feature gaps.
So it’s a bit of a desperation tactic, 8 times out of 10. That’s what I see again and again. A CRO struggling, and falling behind, and further behind, and out of ideas. And so the last idea? Raise prices ever more. Again.
I’m all in favor of strategic, annual reviews of pricing. And making real-time adjustments as you launch new features and learn from them.
But if your team’s best idea to slowing growth is raising prices? You have the wrong team.
The only real answer to fight your way out of a rough patch is to find a way to get more new customers.
Not try to extract more from the ones you already have. Again, sometimes that has its place. But not as a strategy.
Don’t let your team off the hook for missing the plan with a price increase. And especially, don’t let yourself off the hook.
