Hi Andrzej,
"Sorry dude, pricing is not our priority at the moment."
This sentence blows my mind whenever I hear it from a prospect. I stick to the rule of not being pushy during the sales calls I run, but this combination of words triggers a nuclear reaction.
Trust me, it's not easy to sell pricing-related services. It's much easier to sell stuff that has those painkiller properties. Like pest control to restaurants. Involuntary churn protection. Legal advice for people who got in trouble with the tax office.
Pain is an interesting thing. It is not objective - it entirely depends on the individual. Did you know there are no pain receptors in your body? Seriously. There are nociceptors, but they don't sense pain. They just register temperature, pressure, and chemicals in your tissues, and the brain decides how it feels. Pain is your brain's construct. And there are people who never feel it - well-described cases of folks who hurt themselves badly because of that.
Bad pricing rarely hurts. You can have a great business with really bad pricing. Sounds absurd, but been there, seen that. Building pricing capabilities within your organisation is like building healthy habits that prevent osteoporosis. You know: exercise, good diet, regular medical check-ups. The boring stuff. Funnily enough, osteoporosis does not hurt either. Until one day you just break a bone in an incident that would not harm you under normal circumstances. But you consistently fucked up in the past, and now your bones are fragile. Bad pricing can make your business fragile too.
Pricing can tremendously improve your profits. Multiple times over, according to many studies. The classic one, published in Harvard Business Review, looked at 2,463 companies: a 1% improvement in price lifted operating profit by 11.1%. The same 1% spent elsewhere did far less - 7.8% from cutting variable costs, 3.3% from growing volume, 2.3% from trimming fixed costs. Same effort, and pricing is the biggest lever by a mile.
Isn't it a paradox? There is this "tool" that can enhance your business so drastically, but you may never feel the lack of it.
Let's just circle back to the osteoporosis analogy. It can be a result of years of bad habits. Or, to be precise, the lack of good habits. You don't need to change anything spectacularly - it is ok to start small. Just start visiting the weight room once a week. Then try to eat more calcium and protein-rich foods. Book a doctor appointment once a year. But for fuck's sake, don't ever try to convince yourself (or anyone else) that: "this is not a priority for now". Health is always a priority. It's the same for your business. You want it to be healthy and sturdy.
It may not be the right week to start. Fine. But do me one favor: never again tell yourself pricing isn't a priority. Say "not this week" if you have to - just put an actual date on the calendar. Your bones don't care about your excuses, and neither does your P&L.
Stay sturdy,
Maciej |
