Business Growth Strategies… Why Not Raise Your Prices?

George Roberts

July 13, 2010

After I retired from Oracle, I became an independent board member of several software companies before I joined the Boston Venture Capital firm, OpenView Partners, that invests growth capital in expansion stage software companies.

One behavior that most founders and or CEOs of the companies I worked with exhibited was an unwillingness to consider raising their prices or charging for additional value-added capability they developed within their products or services. I was amazed that they lacked confidence in the value that they were delivering to their customers.

When I was reading MIT Sloan Management Review and came across an article titled “Raise Your Prices!” by By Frank V. Cespedes, Elliot B. Ross and Benson P. Shapiro, I knew I had a topic for this week’s blog.

The key to being able to raise your prices as a company relies on your ability to compete on performance versus price.

The article has a list of 5 Questions You Need To Ask Yourself in addition to the 4 steps to go through to switch your company to performance based pricing:

  • Identify Value Opportunities
  • Set Priorities
  • Align Price and Value
  • Get Cooperation

Then at the end of the article it lists the Seven Mistakes Of Poor Pricers.

So if you are looking for business growth strategies that can have an immediate impact, you and your management team might want to check out the article and consider moving to performance based pricing…

All the best!

G

Venture Partner

<strong>George Roberts</strong> is a Venture Partner at OpenView. He enjoys partnering with companies and helping them achieve their goals through strategy, focus and operational execution. From 1990 to 2003, George spent 13 years at Oracle Corporation, most recently having served as Executive Vice President of North American Sales. While at Oracle, George was responsible for over $1 billion in revenue and more than 2,000 employees, reporting directly to the company’s CEO and Chairman, Larry Ellison.