issued on:
March 31, 2025
author:
Ulrik Lehrskov-Schmidt

TLDR: Pricing is not a democracy. Don't involve the org.

Monday Price Point:​


There is a misguided intuition that since pricing affects everyone, then everyone should also be involved in making pricing decisions.
​This is wrong.

By definition people across the organisation are very focused at their own job. This makes it hard for them to look at the whole organic picture of the organisation. So they don't: instead they try to focus on *their* part of the organisation and make that better.

Sales try to make sales work better. Finance will try to solve finance problems. Legal will focus on compliance. And so on.

"Should we change the pricing model from 'Per User' to 'Per Unit of work'?"

Sales: Customers will not understand that.
Finance: That is not possible with our entitlement engine.
Legal: We can't change contracts on our top accounts.

Problem is that people see problems and issues for themselves, not opportunities for the business.

Instead: Be a benevolent dictator. Listen to everyone, then sit down and make an informed decision. Then show it to everyone inside and outside of the org to validate the new pricing before pushing it into the market.

But it is not a democracy. It is your decision.

​How to do it:


Pick one person. This is your pricing dictator.

If you are below $25M ARR, then that person is the CEO (or at least a co-founder). If you are above $25M, you can do a C-level exec or a key strategy person.

Interestingly: this can *never* be your Head of Pricing. That person helps the dictator, but does not make the big decisions him or herself.

Let the Pricing Dictator lead a team of 2-4 key people who represent various functions (e.g. Sales and Product).

They sit down and evaluate new pricing options 2-3 times a week until you agree on a new model. The dictator makes the final call.

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We can't help you tinker with your pricing. But if you're ready for a redesign, connect with us.

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