Establishing a Competitive Pricing Strategy

Are you pricing to the 10% of your customers who are never happy?

When you look at your customer base in your business, they will typically range from your ‘raving fans’ to the ‘will never be happy’ group.

When you look at your pricing, you might think you have to offer one price to all your customers. If your pricing strategy is a ‘one size fits all’ variety, there is a fact of human nature that affects your pricing:

You tend to hear the 10% crowd loud and clear when they complain, but forget that the other 90% are happy.

As a result, businesses tend to develop their pricing policy to keep the 10% group happy (which never happens anyway) and the other 90% would gladly pay a little more, but only if you asked them to! It’s human nature to not want to endure a customer complaining about the price.


Why not test some price increases and just prepare to take some abuse from the 10% group? Observe what happens with the other 90%. What if they accepted and happily paid the new pricing?

Isn’t it better to price your offering to the 90% group and just take the hits that come from the 10% group?

What’s the worst thing that could happen? (Potential answer – you make more money and the 10% decide to go to your competition!)

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Author: Paul Foster
Paul's life’s purpose is to bring more cash, freedom and happiness to independent business owners. Paul wants to learn about your toughest business challenges and frustrations so he can help you tackle them.


  • Wow… did you just read my mind. I was recently contemplating some price increases. I think I personally was swayed more by the 10% than the 90%. I think I need to do some re-evaluation on that.

    • You might be surprised how often that happens. Don’t forget you can do some price testing with your proposed price increases to test the water and build confidence in what we both know is a well differentiated and valuable offering.

  • Pricing strategy deserves serious discussion and consideration. There are several strategies to consider depending on the customer segment, competitive situation, size of business, region, industry, etc. And there can be various combinations of the strategies depending on variation of the above factors. Pricing has such a significant impact on margins, ROI and branding that the topic deserves in-depth analysis.

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