As companies transition into the new year, refining pricing strategies often take center stage. Pricing decisions are essential in defining revenue growth, yet many organizations fail to unlock the full potential of strategic pricing. Instead, they rely on outdated methods, and reactive discounting, leading to missed opportunities.
Fast starters have a different approach by leveraging pricing as a tool to create early wins and stamp out lingering price negotiations.
Pricing Paralysis and the Need for Precision
For many commercial teams, pricing is more reactive than strategic. Despite routine first-of-the-year price increases, it’s not uncommon for sellers to continue honoring the previous years pricing. This begins the year with an unclear discounting strategy that is hard to recover from.
As a result, time must be invested into managing these discounting decisions, causing the leadership team to question their changes and losing confidence in sellers' pricing strategy. Price negotiations become drawn out conversations with the customer that stifles early potential wins.
Companies that approach pricing without precision fail to achieve early momentum. This stalling creates a ripple effect that impacts growth throughout the year.
What Fast Starters Do Differently
Learn and Redeploy
Fast starters approach early-year discounting with a “learn and redeploy” mindset. They begin by establishing top-down guardrails for discounting, typically tied to deals carried over from the previous year. These guardrails are explicitly communicated and closely governed to ensure alignment across the commercial team.
Once initial deals are closed, fast starters conduct a root cause analysis to uncover what is driving the discounting. Is the need a reflection of market feedback or does it stem from a seller enablement challenge? To answer this, fast starters conduct segmentation exercises to analyze early buyers and identify patterns to distinguish between customer buying purely because of the discount from those who value the offering.
This process gives the team data from which to make timely adjustments to pricing based on early market signals. Whether the environment calls for price reductions or increases, fast starters move to set a sustainable course for the year ahead.
Drawing a Firm Line
Fast starters know that Q1 momentum depends on consistency and decisiveness. They establish a clear threshold for discounting and enforce it. By setting a firm deadline for when discounting stops, they prevent pricing conversations from dragging on throughout the year.
This approach creates urgency in customer conversations and ensures the commercial team transitions from discount-driven deals to value-driven relationships. Having the discipline to draw a firm line allows pricing to become a tool for driving early momentum and long-term success.
Impact of Achieving a Fast Start
Slow starts are the result of reactive pricing strategies. Getting off to a slow start delays momentum and creates a ripple effect that is hard to recover from. When pricing conversations drag on throughout the year, confidence in the pricing strategy is diminished. The longer it takes to turn Q1 price negotiations into wins, the higher the risk of long-term delays.
Fast starters, on the other hand, take control by drawing a firm line that prevents extended discounting and drives value-based deals. By providing clarity on a discounting deadline, commercial teams can move forward with an effective pricing strategy.
Dive deeper into the research report, How a Fast Start to the Year Defines Your Growth Outcomes.
