Avy Punwasee, Partner at Revenue Management Labs, was recently featured in Fast Company where he outlines the key shifts businesses need to make in their pricing strategy to stay competitive, drive growth, and better align with customer value.
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Over the past decade, nearly every part of business has evolved. We design with the customer in mind. We produce faster and more efficiently. We run leaner operations, deliver quicker, market with precision, and support customers long after the sale. Yet when it comes to pricing, many companies are still relying on outdated approaches that do not match the innovation in the rest of the business.Â
Many companies are still using legacy pricing models that no longer reflect how customers buy, what they value, or how they consume the product or service. If your pricing hasn’t changed in years, the truth is it’s likely holding your entire growth strategy back.Â
Why Pricing Gets Stuck
Pricing is notoriously hard to change. It impacts revenue immediately, involves risk, and requires alignment between product, sales, marketing, and finance. Many teams avoid it until forced to act, usually when growth slows, profitability dips, or competitors start pulling ahead.
The companies winning today do not treat pricing as a one-time decision. They leverage it as a strategic advantage and redesign it around the customer experience.
Step Into the Customer’s Shoes
Strong pricing starts with empathy. That means going beyond surveys to deeply understand your customers’ needs, frustrations, and goals.Â
Ask:Â
- What outcomes are they trying to achieve, and how will they measure success after purchase?Â
- Where do they see the most value, and what problems are holding them back?Â
- How does it affect their efficiency, costs, or profitability?Â
- How do they research and shop for solutions?
- Who is involved in their decision-making process?
- What expectations do they have for service, delivery, and support?Â
- What trends or market forces are influencing their buying decisions?Â
This naturally shifts companies away from cost-based or historical pricing models and toward strategies built entirely around the customer. Instead of charging for features or access, you align your price with results such as cost savings, risk reduction, or revenue growth.Â
Embrace Modern Models
Flat tiers and volume discounts still have their place, but they are often too rigid for today’s markets. Many companies are finding success with:Â
- Usage-based pricing, where customers pay based on consumptionÂ
- Value-based pricing, where price reflects perceived or delivered valueÂ
- Outcome-based pricing, where fees depend on reaching agreed resultsÂ
These models may feel risky at first, but when built around real behavior and clear value, they can increase adoption, improve retention, and boost lifetime value.Â
The key is transparency. Customers should know exactly what they are paying for and why it matters. Clear communication about pricing builds trust and sets you apart from competitors who hide costs or overcomplicate their offers. This often requires a much deeper level of reporting, showing customers not just the price but the outcomes achieved and how their consumption is happening across different areas or time periods.Â
Design, Do Not Just Decide
Pricing is as much a design decision as it is a financial one. The most effective pricing strategies are tested, iterated, and co-created with customers.Â
Borrow from UX principles:Â
- Make pricing pages intuitiveÂ
- Guide users through the value you deliverÂ
- Eliminate points of friction in the buying processÂ
Just as product teams test prototypes, pricing teams should experiment with structures, monitor engagement, and adapt quickly.Â
Break the Set and Forget Habit
Treating pricing as static is a missed opportunity. Markets evolve quickly, and competitor moves, new regulations, and changing customer priorities can all shift perceived value. Yet many companies avoid regular reviews because of fear of customer pushback, internal resistance, or uncertainty about how to make changes without risking revenue. Committing to a review every 12 to 18 months helps overcome these barriers and keeps pricing aligned with both customer expectations and business goals.Â
The Role of Data and Feedback
Modern pricing innovators rely heavily on data. Tracking customer behavior, product usage patterns, and churn signals can reveal whether your current structure is helping or hurting you. Combine these metrics with qualitative feedback to see the full picture.Â
Customer interviews, focus groups, and win-loss analysis often uncover gaps between what you think your buyers value and what they actually care about. Spending a day or even a week in the customer’s shoes is another powerful way to surface insights you will not get from surveys alone. Closing this gap leads to pricing that feels fair, relevant, and motivating.Â
Build Internal Alignment
Pricing success is not only about customers. Your internal teams must understand and believe in the pricing structure. When sales, marketing, finance, and product teams are aligned, they can communicate value more effectively and handle objections with confidence.
Regular internal training, pricing playbooks, and accessible resources help keep everyone on the same page. This reduces discounting pressure, ensures consistent messaging, and builds the confidence needed to stand by your prices.
Overcome the Fear of Change
One of the biggest obstacles to modernizing pricing is fear—fear of losing customers, fear of making a mistake, and fear of short-term revenue dips. While these risks are real, they can be managed through controlled testing and gradual rollout.Â
Start small with a single product line, market segment, or geography. Use the data from these pilots to refine your approach and build a stronger business case for broader changes.Â
The Future Belongs to Innovators
The market leaders of tomorrow will not just have the best products or the biggest marketing budgets. They will have pricing strategies built on clarity, empathy, and outcomes.
Ask yourself: Does our pricing reflect the world our customers live in today? If the answer is no, you have work to do.
