You’ve Got To Lose Some Sales

Pricing your product or service is one of the hardest things to do in a startup. While you never really know what price is a good price from the outset, the best barometer of pricing fit is to monitor how many deals you are winning and how many deals you are losing.

If you are not losing deals due to price, your price is too low. You’ve got to lose some sales, otherwise you are leaving too much money on the table with the deals that you are winning.

If you are getting your butt kicked by underbidding competitors, you need to either vastly improve your positioning and starting winning, or you need to reduce your price and do better.

We’ve been winning too many deals lately. We’ve started to raise some of our prices and have had internal discussions about how to do this systematically. Today, we lost a small deal due to an underbidding competitor. It felt good to lose that one, because it means we’re approaching a better price.

What are your thoughts on losing some sales?

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