Most growth companies think about pricing too late, and for the wrong reasons.
It usually comes up when growth slows, margins get tight, or the sales team starts pushing for more room to close deals. Suddenly pricing is “the problem” and discounting becomes the solution.
But when companies start leaning on discounts to drive growth, it’s usually a signal of something deeper: an unclear value proposition, a product that hasn’t kept pace with the market, or a strategy that’s become more reactive than intentional.
The companies I’ve watched navigate pricing decisions well have several things in common. They set their price for a reason, they understand exactly what problem they’re solving and what that solution is worth to the customer, and they protect that position even when things get uncomfortable.
That discipline is a form of confidence, and it tells the market something.
Pricing is a strategic decision. Not a sales tactic, not a lever to pull at the end of the quarter, and not something to hand over to the sales team. Once you treat it that way, everything else gets a lot clearer.
Pricing reflects the value you create
When I ask founders how they set their initial price, most tell me they looked at what competitors were charging. That’s the wrong starting point.
Every successful business solves a problem. The right question to ask isn’t what the competition charges, but what solving the problem is worth to the customer. How much time are you saving them? How much risk are you removing? What would it cost them to go without you? Once you can answer those questions, pricing becomes a lot less mysterious.
The mistake most early-stage companies make is they’re so focused on getting that first deal signed that they don’t think carefully about what they’re setting up for later.
One company I’ve worked with built a genuinely strong product, but priced it too low out of the gate. Eight years in, every customer knows what everyone else is paying. Raising prices now means fighting not just buyer resistance, but the market’s memory. That’s a hard position to be in.
The other trap is the long-term fixed-price deal. It feels like a win when you sign it. By year three, when the customer wants to renew at the same number and your costs have climbed, it’s anything but.
The question you need to keep coming back to is simple: is our value still supporting our price? If yes, pricing pressure likely points to a sales or communication problem. If no, there’s a larger strategic issue to address.
Discounting often creates more problems than it solves
Every discount establishes a new reference point. Customers remember what they paid, and sales teams remember what they were allowed to offer. So, future negotiations begin from that lower baseline.
I hear leaders justify discounting during economic slowdowns, and my view has always been that lowering prices in a downturn is one of the worst strategic decisions a company can make. A company might pick up incremental revenue for a few months and then spend years trying to restore pricing to where it was.
Recessions are temporary; pricing expectations are not. And the return of the market to a growth period outlasts the recession.
If you need to create flexibility, do it through packaging or scope, not price. Offer a reduced level of service at a lower price point if you must but protect the price itself.
Once a company begins competing primarily on price, it becomes increasingly difficult to compete on anything else.
Pricing erosion starts long before the margins show it
Pricing challenges rarely appear overnight, and the early signals are usually hiding in plain sight: sales cycles getting longer, customers pushing back on standard rates, competitors winning deals that used to be routine closes. When those patterns show up, the instinct is to look at pricing first. That’s usually the wrong place to start.
Instead, boards should be looking harder at what’s driving the pressure before drawing that conclusion:
- Has the company lost confidence in its value proposition?
- Are competitors offering something meaningfully better?
- Has the product become less differentiated?
- Or has pricing simply become disconnected from the value being delivered?
The root cause usually has more to do with positioning than price. If a customer is leaving, the question worth asking is why they stopped seeing the value, not how to adjust the price to keep them.
Boards should also be asking whether the company is still solving the original pain point. When a competitor can deliver most of what you offer for a lot less, some customers will take that deal. That’s a product and service problem, and discounting won’t close that gap.
Closing perspective
Growth comes from sales and marketing, building the right product, and solving the right problem well enough that word gets around. That’s what drives adoption.
Strategic thought beats reactive thought every time, and pricing is one of the places you can see whether a leadership team is strategic or reactive.
Boards tend to spend most of their time on revenue growth, acquisition, and profitability. Pricing deserves just as much attention, because it sits right at the center of all three. It tells you whether the value proposition is real, whether the market believes it, and whether the company has the discipline to protect it.
Pricing is a strategic decision. Made well, early, and defended consistently, it’s one of the clearest signals of a company that knows what it’s doing.
Author Bio
Syd Weinstein is a technology executive, board advisor, and strategic problem-solver with decades of experience helping growth companies align technology with business outcomes. His expertise spans SaaS growth strategy, cybersecurity, pricing structures, product development, and customer experience, with a particular focus on connecting technology, operations, finance, marketing, and sales into a cohesive strategy.
Syd has served on the advisory board of Prelude Solutions and is a fiduciary board member at Near-Miss Management. He has held leadership roles with organizations including PeopleMetrics, sevenEcho, New Era Tickets, Myxa Corporation, and Datacomp Systems. He was also recognized by SmartCEO Magazine with the SmartCxO Award and has received the Chris Pavlides Networking for Life Award from the Greater Philadelphia Senior Executive Group.
Syd is also a Member and former Treasurer of Executive Leaders for Advisory Boards (ELAB).