Myth busters for raising prices
Pricing can make or break an organisation‘s success. If you don’t regularly revisit your pricing decisions or experiment with price, you could be losing out.
Even a relatively little effort can go a long way in embracing this powerful lever. For example, one online retailer saw a 5:1 Return on Investment (ROI) in just 6 weeks of pricing experimentation designed by Untapped.
Interested in learning more? Check out Untapped’s Price Testing service.
Myth busters for raising prices
Start with simple price experiments.
Spot opportunities to test your hypotheses and run simple price experiments. By removing the guesswork, you can begin making evidence-led decisions on pricing.
Try it: Write down 3 instances where you suspect you are under-pricing (eg. a particular type of customer or product). These are your priority candidates for price experimentation.
Set expectations and focus on value.
You don’t need to be apologetic about raising your prices. Customers are surprisingly resilient to change when they value your product and you communicate well.
Set customer expectations & use price changes as an opportunity to draw attention to recent improvements in the product and the value on offer.
Prioritise the customer experience.
Preparation is key. Think about when and how price changes are communicated and ensure the team is ready to handle pricing queries and any pushbacks.
Set guardrails in your key metrics and assemble a mitigation plan so you already know what to do if customer reactions aren’t as expected.
Small changes can have a big impact.
A 1% improvement in pricing results in an average increase of 11.1% in operating profit. No other business lever has that impact, not cost optimization, volume increases, or anything. The answer is pricing.
