Game Theory · 4 min read
Price changes are among the most powerful decisions a business makes, and among the easiest to get wrong. Run through these five questions before you change anything.
1. What are customers actually paying for?
Ask recent customers why they chose you and what they compared you with. The answer tells you how much room you have and which parts of your offer carry the value.
2. Who will leave, and does it matter?
Some customers will go when prices rise. Work out which ones, and whether losing them would hurt profit or simply free up capacity for better work.
3. How will competitors respond?
A rise can be an opening for a competitor; a cut can trigger a matching cut. Write down what each main competitor is likely to do and how that changes your result.
4. How will you explain it?
Customers accept changes they understand. Plan the message, the timing and who tells your largest customers in person.
5. How will you know if it worked?
Decide in advance what you will measure (win rate, churn, margin, enquiries) and when you will review it. Set the point at which you would change course.
None of these needs a large project. They do need the discipline to ask them before the change rather than after.