Pricing strategy

How you set the number. The fastest lever on profit and the least examined.

What it means

Approaches include cost-plus, competitive, value-based, penetration, skimming, and price discrimination by segment.

Why it matters

Price is the most powerful lever on profit: a 1% price increase, if volume holds, drops straight to the bottom line, where a 1% cost cut rarely does.

What it looks like in practice

Value-based pricing asks what the outcome is worth to the customer rather than what it costs you. It is harder, and it is where the margin is.\n\nTest with new customers before repricing existing ones.

What to watch out for

Competing on price without a cost advantage. And discounting habitually, which trains customers to wait — see margin for what a discount actually costs.\n\nPrice marking rules require prices to be clear and inclusive of tax for consumers.

Where to get proper advice

Your own margin analysis by product, and your own win rate. A pricing consultant if the stakes are large.