• Avrogan

Pricing in Times of Uncertainty


No matter if you sell services (SaaS, PaaS, XaaS) or products, you have probably been affected directly or indirectly by the current economic consequences of the COVID-19 pandemic. Although for some the consequences may not be favorable, there are ways to manage the situation and lay down some bases so you can catch up easily when the situation gets changed.


Here we would like to provide some tips on how to think about implementing your business and pricing strategies and how to manage the cash flow pressure in these times:

Pricing in times of uncertainty


Before you start thinking about how much to change prices, try to put the situation into context by reminding yourself of two topics:


1- No crisis lasts forever. Economy goes up and down and it has always been like that. Therefore, while you are tempted to think short-term, you also need to have an eye on the long-term consequences of your pricing decisions on your business.


2- Pricing is part of your marketing mix, thus has direct connection to your customers’ value perception of your offerings, your brand positioning, and the trust you create in the eyes of your customers. Changing it carelessly, you will affect your business in ways that you might not be able to recover from easily.


Having these two points in mind, let’s see what you can do in these times. We got three points here:

1- Don’t touch the price

While economic pressure and uncertainty put extra stress on your business, remember that it is most likely the same situation for your customers. It’s a good time to invest in your business relations. So, your first task is to discover how to provide extra value for your customers while you keep the prices constant. The first step in your strategy in managing a hard economic situation should be avoiding discounting. Instead, increase the value perception by providing extra scope of services for the same price. Of course, you should be mindful of the cost of those services. Be transparent to your customers and communicate that it is extra service to make sure they are going to pass this time smoother. After all, their success is your success!


While you do this, remember the two contextual points: After this time, you are in a better relationship with your customers, and your perceived value is higher than today. It will give you greater business opportunities and price adjustment flexibility with better margins.

2- Mindful discounting

OK! Of course, in some cases, big value for some segment of your customers in crisis is to lower their costs doing business with you, and at the same time for you to keep the business going.


In such cases, you might consider reducing prices, but then you need to do it in a very mindful manner. Communicate price decreases as a time-limited offering and always communicate the original prices. If you can combine the discounting and bonuses, go for it!

Remember, you are discounting to keep the business going. For that, you need to drive behavior and measure the performance of your discounting program. Bonuses are good to give back the value after you make sure you also receive the value you are expecting from providing lower prices.


Again, be consistent and transparent in the cause and program. The most important asset here is trust and the perceived value, and you preserve them with the right communication.

3- Keep customers close – Think service

Keep finding ways to have closer and more frequent talks with the customers. Online of course, whenever possible!


You might get surprised how much you can learn about day to day concerns of your customers by having close relationship with them. There can be many new ways you might be able to help them. For instance, you can think of temporary changes in production line, delivery times, availability of services or products, or even sell more in terms of services or service contracts than only products. You might even be able to find new segments to offer your products and services where your capabilities can help them in times of crisis.


Times of economic uncertainty are also good times to rethink the business processes and models. Try to be part of that journey of your customers while you are thinking about yours. While you try to provide your offering through new channels, you will get away from sabotaging your current business and pricing strategies. This not only helps you in long term to develop on your new business models and invest in your value perception but also you create stronger customer trust and relationship by being on the front line of top valuable business partners.

Now, while we’ve tried to provide some general guidelines here on how to manage your pricing and business strategies during hard times, we know that not all guidelines match with every business model. We would be happy to talk to you about what kind of business and pricing strategies can help your business in these times.


Fill free to contact us to discuss it further.



54 views

©2020 by Avrogan. All rights reserved.