Pricing strategy is one of the most delicate and underrated pillars that differentiates those who grow, from those who fail.
When I was at business school we examined case studies all day, every day. Translation: we studied what businesses of every size, based out of every country, did to succeed and fail. One of the largest differentiators between the success stories and the death stories was their pricing strategy.
Ironically, the highest maintenance and most unhappy demographic to work with, is the group of people who prioritize low prices, over customer service. When you begin discounting your product and going from one sale to the next, you start to attract these people. Once you become a target for them, it’s hard to get rid of them. They chew up the energy and time of your sales team, turning the company culture sour.
In general, there are two groups of people: those looking for a bargain and those looking to start a long term relationship with a customer service centric company.
When you allow your margins to be higher, you are able to attract educated and self-motivated employees and market to a more educated and relationship-oriented demographic. When your employees are paid above market average, they have less to stress out about at home and therefore perform better at work. When they perform better, the whole company wins.