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Your Price is a Strategic Weapon


Pricing is one of the big strategic decisions that can easily be neglected.

To me, it is one of the 3-4 biggest strategic decisions you make as an executive, right up there with:

  • Your brand codes
  • Your target market segment
  • Your position in the market

To me, your price manifests these decisions for your target market. 


Price is a signal. 

It tells your market whether or not you are a premium product or a budget service. 

Price conveys to your target market what your position is in the market. 

The price you set can tell your audience that you are top shelf or “average”. 

Price can underline or undermine your brand equity. 

Underline by being consistent with your strategy. Undermine by using price as an afterthought to your plan. 

Why are we talking about this?

Your price impacts the delivery of your strategy in three important ways:

  • Awareness
  • Perception
  • Profits

Awareness matters.

Someone can’t buy from you if they don’t think about you when they are ready. 

In B2B sales, if you aren’t in the 3-4 business consideration set at the time consideration happens, no amount of persuasion will help. 

In B2B sales, the average business I work with finds that it takes 11-13 touchpoints before a customer buys. 

Both of these examples highlight the importance of awareness. 

This is why I remind everyone to keep the two iron rules of marketing in mind at all times:

  • The 60/40 rule states that your marketing mix should be about 60% brand building to 40% sales activation.
  • The 95/5 rule states that only 5% of your B2B customers are in the market for your services at any time. 

Perception can make you. 

Perception can also break you. 

The perception your price creates can help you or hurt you in several ways. 

Your price can shift or underline the perception of value to your target market. 

Your price can signal you are high quality or low. 

Your price can signal that you are a good value…or, poor value. 

This is one of the reasons I tell you that the price-setting moment is marketing’s MVP moment.

Because it can make or break the perception your customers have of you. 

Pricing = Profits! 

This magic equation is why I tell marketers to fight for their place in the pricing conversation. 

For every 1% of the price you keep or grow, your profits grow around 11%. 

This has been studied many times and tracks with my work. 

The opposite also applies. 

For every 1% you discount, you lose 10% or more of your profits. 

This has been studied. 

This tracks with my work.

Discounts destroy your brand. 

Discounts are the fastest way to undermine your perception. 

Discounts also destroy your profitability. 

Because it isn’t what you make, it is what you keep. 

How these three things intersect makes me say, “Discounts are for dummies!”

Where does strategy come into this?

First, there is the “Endless Growth Trap”. 

This is the idea that people feel the only direction they can go is up. 

Anything less than growing sales is a disaster. 

It isn’t true. 

You can make a lot of sales and little profit. 

The reality is:

  • There is a finite number of opportunities. 
  • The buyer’s path is long and getting longer for many decisions. 
  • Your branding efforts take time to root themselves, but your price can tear these efforts down quickly. 

Second, strategy is about three key ideas:

  • Your focus: what does success look like?
  • Consistency: are you delivering against that focus again and again?
  • A through line: are you staying focused even when your tactics change?

Your price helps with that. 

Your price sets should reflect your focus:

  • Who is it for?
  • What do we want our position to be? (Cheap/expensive? Premium/Accessible?)

Your price should underline your brand:

  • Are we showing up the way we want to? 
  • Does our market see us the way we want to be seen? 

Your price should help you achieve success. 

  • Are we selling at the right price? 
  • Are we signaling the right kind of value?

What do you think?
Are you using price as a strategic weapon?
Or, is your price all over the place? 

Let me know, hit reply. 


Please do me a favor and share this piece with someone who needs to better think through their pricing.