Key Takeaways
- Increase prices strategically instead of applying the same increase across every customer and product.
- Use pricing capability to protect margins while keeping customers on board.
- Recognise what drives a successful price increase before scaling the approach.
- Give proven pricing teams the authority to turn better models into lasting growth.
When rising costs force businesses to increase prices, the obvious answer is often a blanket increase across the portfolio. But smarter pricing can protect margins without pushing customers away. The real challenge is making sure the organisation understands what made the price rise work.
Read This CEO Strategy to Increase Prices & Improve EBIT
What Actually Happened When We Increase Prices
The CFO drops into the chair across the desk, folder open. “We’ve got a problem. Costs are up everywhere, but not evenly. Recovered paper’s up because China keeps changing the rules. Resin’s up because it’s shipped in from Asia. Freight and energy are up on both.”
“So what’s the number?”
“Six per cent. One number, across the whole portfolio, every brand, every range. Don’t overthink it, the board wants a figure, not a breakdown.”
“Some customers won’t even notice six per cent,” the CEO says. “Others are going to feel like we’ve mugged them for a cost that isn’t even theirs.”
“I don’t have time to model every account before this board pack’s due.”
“That’s not what I’m asking for. I’m asking why we’re about to give the same answer we’d have given three years ago, before we hired someone specifically so we’d stop giving it.”
The CFO doesn’t quite meet his eye. “The analyst doesn’t have clean enough data to do better than a blend.”
“Send her what we do have. All of it, not the summary. Let’s see what she can do with it.”
She builds it anyway, working within the business as it actually is, broad segments, real constraints, still sharper than one number slapped across every brand. It lands. Margin improves. Not one account walks.
In the boardroom, the CFO opens with the result. “We targeted around six per cent. Margin’s up, every account held.”
A director leans forward. “Wasn’t the pricing work more sophisticated than that?”
“The overall result landed around the same place,” the CFO says.
Weeks later, someone else walks the board through the actual model, showing exactly where and why it wasn’t a flat number at all. The CFO’s answer isn’t an apology. “We’d have landed roughly the same number either way. Didn’t think the distinction mattered.”
Why Businesses Increase Prices
There’s a recognisable pattern here: if you can’t stop a change, you diminish what it achieved. First the work gets called ordinary. Then, once that’s disproven, it gets called irrelevant. Two different moves, same function, keep the outcome small enough that it doesn’t have to mean anything.
The first mechanism may be status quo bias. The existing process was familiar, controllable, understood. A new pricing capability challenged that, not because the numbers were wrong, but because the process now sat outside his hands.
The second is different. Once the new approach worked, the organisational question changed. Who gets credit? Whose judgement carries weight next time? What happens to existing authority when a specialist capability starts producing better answers than the person who used to own that decision? Self-serving bias offers one explanation here: successful outcomes are easier to embrace when they reinforce our own judgement than when they strengthen someone else’s.
Two different mechanisms, one person. The first kept things still for years. The second kicked in the moment the status quo stopped being an option.
What Price Increases Means for Growth
Six per cent flat across a whole portfolio of brands was never really the risk in this story. The business had proved it could improve pricing, reduce complexity and still grow margin. The bigger question was whether the organisation could accept what that proof changed.
Because new capability doesn’t just change the answer. It changes who produces the answer, whose judgement carries weight, and how decisions get made. That’s why pricing transformation can’t stop at the model.
A new pricing function shouldn’t get full authority on day one, it hasn’t earned it yet. In a way, every pricing team needs to go through some version of this test, working inside real constraints, without legacy, without the keys to the system, proving the capability before anyone hands over the trust that goes with it. That part’s fair. Authority should follow demonstrated capability, not a job title.
But once that capability has been demonstrated, continuing to withhold authority stops being prudent scepticism. It becomes an organisational barrier.
The moment that changes is the moment the proof lands. Once the pricing work has actually and consistently delivered, once the model works and the margin is real, the CEO’s job shifts entirely. The business needs to understand why the result happened. What changed. What capability produced it. Who executed it. And what needs to be protected and built on next.
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That recognition isn’t about handing out credit.
It’s about making sure the organisation learns the right lesson from its own success, and from the hidden weaknesses that success just uncovered. Because if a better pricing model delivers the margin and the organisation concludes “we would have got there anyway,” it doesn’t just diminish the work. It starts to dismantle the operating model that made the result possible: reducing complexity, breaking down silos and giving the business a better way to make pricing decisions.
The risk isn’t that the business forgets who did the work. It’s that it forgets why the work succeeded. And in twenty years of consulting, I’ve seen that most businesses don’t notice the door closing when it happens. They notice six months later, when the platform, the infrastructure, the next acquisition, all the things that additional margin was supposed to help fund, are still sitting on a slide instead of becoming real.
The pricing capability proved the business could generate more margin. But because the organisation never properly recognised what generated it, there was no mandate to build on the capability that produced it.
If that sounds like a pattern worth checking for in your own business, reach out. Happy to talk it through.
Read This CEO Strategy to Increase Prices & Improve EBIT
Are you a business in need of help aligning your pricing strategy, people, and operations to deliver an immediate impact on profit?
If so, please call (+61) 2 9000 1115.
You can also email us at team@taylorwells.com.au if you have any further questions.
