E85 | Pricing is a Function (Summer Series)

Many leaders avoid pricing decisions due to fear of losing volume, yet pricing has the greatest impact on profitability. Andres Zylberberg, Richard Peake and I continue our summer series on why pricing must be treated as a core business function rather than an ad hoc reaction when profits decline.  A critical factor is pricing elasticity: different products and services respond differently to price changes, and profit often sits in low-elasticity areas where prices can increase with minimal volume loss. Structured pricing systems, clear guardrails, regular review cadences, and defined ownership help remove guesswork and fear. Shifting the mindset from cost-plus or fear-based pricing to value-based pricing enables smarter decisions, better conversations, and sustained profit growth.  Takeaways  Pricing decisions drive profit more than volume, costs, or overhead reductions. Fear of losing volume often causes leaders to delay necessary pricing changes.  Different products have different price elasticities, and most leaders misjudge them.  Profit often sits in low-elasticity areas where price increases barely affect demand.  Clear pricing guardrails remove emotion and improve decision-making across teams.  Value-based pricing shifts conversations from discounts to impact and outcomes delivered.  Regular pricing reviews create discipline, predictability, and sustained profitability.  In this episode, we mention Hermann Simon who is the world’s leading expert on pricing. More information: https://hermannsimon.com/  Watch the episode on YouTube: https://www.youtube.com/@TheEvolutionPartners  Newsletter – each week I share interesting insights, articles and ideas you can use. Join other leaders and subscribe to The Evolution Partners newsletter https://evolutionpartners.com.au/subscribe/  Books – Learn more about our books https://evolutionpartners.com.au/books/ Made to Thrive: The practical, prescriptive guide on how to be a great CEO Onboarded: How to bring new hires to the points where they are more effective faster. A business case for leaders on why you should commit to an effective onboarded process. Onboarded for Managers: Helping managers bring new hires to the point where they are more effective faster. Bigger isn’t Better, Better is Better: Avoiding the pressure of endless growth to build a better business (and better life)  Follow me: on https://au.linkedin.com/in/bradleygiles on https://twitter.com/Evolution_Perth  Enjoying the show? Leave a review Support the show: https://www.facebook.com/evolutionpartnersperthSee omnystudio.com/listener for privacy information.