5 Reasons Pricing Should be a 2024 Priority

There’s likely a long list of potential value-creation strategies you’re considering for 2024. No matter how you prioritize the initiatives, not all are created equal. Whether prioritizing initiatives based on total ROI, likelihood of success, or speed to realization, one initiative comes out on top in all categories – pricing.

Whether you’ve never thought about pricing before, have tried to fix it but with lackluster results, or simply believe it won’t work for your unique business, the many facets of economic uncertainty we’ll face in 2024 necessitates that pricing gets a closer look.

Here are the top 5 reasons why pricing should be a top priority for 2024:

1. Profit Improvement

There's no lever more effective for driving profit improvement than pricing. In fact, it’s at least 50% more effective than traditional cost-out or share-gain strategies, according to a study published by the Harvard Business Review. Not to mention, it’s measurable and fast to realize, making a focus on pricing a no-regrets decision.

2. Sales Efficiency

When prices are poorly set – not market-relevant, not differentiated by customer value, or misaligned with company strategy – sales efficiency suffers. We’ve seen first-hand that poor pricing habits can lead to sales reps spending up to 40% more time on admin work related to pricing and quoting. The bulk of this time is spent debating the “right” price and chasing internal approvals. Fixing pricing will refocus sales efforts where they should be, on selling.

3. Customer Experience

When sales efficiency suffers, the market-facing implication is concerning for customers. Poor pricing can mean it takes weeks to produce a final customer-ready quote. This frustrates customers – “How can you not know the price of your own product?” – not to mention putting many deals at risk. It shouldn’t be that hard, or that slow. Additionally, if you serve customers across multiple channels, any disconnects in pricing can further erode customer trust.

4. Handling Volatility

2024 is shaping up to be a volatile pricing environment, with uncertainty around inflation, commodity prices, supply availability, and localized demand patterns. Regardless of how these economic factors shake out, two things are certain: 1) You must get pricing right or you risk losing revenue and profit; 2) These factors are likely to remain volatile, so this week’s pricing answer is not likely to be the answer next month.

5. Commercial Maturity

When exits finally pick up, those best positioned to reap maximum valuations are those most able to demonstrate consistent profitable growth. Yes, past performance is a big element of that equation, but more so is go-forward potential. Companies with a robust pricing strategy backed by capabilities and processes will be best positioned to support projections of continued, and more importantly consistent, profitable growth.

2024 is likely be another volatile year, requiring an all-hands-on-deck effort to drive profitable growth. You’ll have to remain focused and place your bets on a select few value-creation strategies to have an impact. Pricing is the bet you can’t afford to pass on.

Connect with an experienced pricing expert to learn more about the impact strategic pricing can have on your profitability in 2024.