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There’s something interesting that happens when business owners start talking about raising prices.
We can talk about increasing revenue, hiring better people, improving service, and growing the company. We’re comfortable having those conversations.
But the moment we start talking about charging our customers more, something changes.
We get uncomfortable.
What if customers leave? What if they push back? What if they don’t think we’re worth it?
So we decide to wait. Maybe another six months. Maybe until we’ve improved the service a little more. Maybe until we feel more confident about what we’re delivering.
And that decision seems reasonable at the time.
But there’s a problem with waiting that I think a lot of business owners don’t fully appreciate.
The longer we avoid raising prices, the harder it can become to justify raising them.
I call this the pricing discomfort loop, and it’s one of those cycles that can quietly weaken a business while the owner feels like they’re doing the right thing by keeping customers happy.
Why the Pricing Discomfort Loop Starts
I think most business owners genuinely want to take care of their customers.
We want people to feel like they’re getting a good deal. We want to deliver something valuable, and we certainly don’t want to lose customers because we got too aggressive with pricing.
There’s nothing wrong with any of that.
The problem starts when our discomfort with a customer’s potential reaction becomes the thing determining what we charge.
Think about what happens.
Our costs continue to rise. It costs more to deliver the same service. More to maintain the same level of quality. More to keep the business operating.
But our prices stay the same.
So now we’re making less money on the same work.
And because we’re making less money, we have less available to invest back into the business.
We can’t improve the service as quickly as we’d like. We can’t build the capabilities we know would make us better. We’re trying to maintain what we already have with increasingly limited resources.
And here’s the part that bothers me.
The very thing we were waiting for, having a better service that would justify higher prices, becomes harder to accomplish because we didn’t raise our prices in the first place.
That’s the pricing discomfort loop.
We avoid the uncomfortable conversation, and in doing so, we create the conditions that make the next conversation even more uncomfortable.
When Lower Margins Force Us to Work Harder
So what do we do when margins start shrinking?
We try to make up for it with volume.
More customers. More sales. More work.
And on the surface, that can look like growth.
But there’s a difference between growing revenue and building a better business.
If we’re taking on more work to compensate for what we’re no longer making on each sale, we’re putting additional pressure on the same business that already doesn’t have enough resources to improve.
We’re busier.
We’re delivering more.
But we still haven’t solved the problem.
In fact, we may have made it worse because now there’s even less time and capacity available to improve the quality of what we’re delivering.
And that matters because quality is one of the things that gives us confidence in our pricing.
When we know we’re delivering something exceptional, the conversation about price becomes easier.
When we’re stretched thin, trying to handle more volume without the resources to improve, that confidence starts disappearing.
So we wait again.
Another six months. Another year.
The pricing discomfort loop continues, and the business becomes increasingly dependent on doing more work rather than earning more from the value it delivers.
The Pricing Discomfort Loop Gets Worse With Time
There’s an assumption I think we need to challenge.
We tend to believe that if we wait long enough, we’ll eventually reach a point where raising prices feels comfortable.
We’ll have improved the service. We’ll have built a stronger business. We’ll have more confidence.
Then we’ll raise prices.
But what if the decision to keep prices flat is actually preventing those improvements from happening?
That’s what makes the pricing discomfort loop so difficult.
It’s self-reinforcing.
Every time we delay, our margins remain under pressure. That limits our ability to invest. Limited investment makes meaningful improvements harder. And without those improvements, the next price increase feels even less defensible.
We’re waiting for the business to become something that our current pricing may not allow it to become.
And we can stay in that cycle for a very long time.
Meanwhile, we keep working harder, wondering why all that additional effort isn’t producing the kind of business we thought we were building.
Higher Prices Can Help Create Better Service
Here’s where I think we need to change how we look at pricing.
A lot of owners think they need to deliver significantly more value before they can charge more.
And there’s truth in that. Customers need a reason to pay what we’re asking.
But the relationship works in both directions.
Higher prices can fund better service. Better service can justify higher prices.
Think about that for a minute.
If we’re earning enough on the work we already do, we have more resources available to improve how that work gets done.
We can invest in quality. We can develop stronger capabilities. We can create a better experience for the people we’re serving.
And those improvements give us a stronger reason to charge what the service is worth.
That’s the opposite of the pricing discomfort loop.
Instead of lower margins leading to less investment, which leads to more pricing pressure, we create a cycle where pricing supports investment and investment supports value.
Of course, simply charging more doesn’t automatically make a business better.
We still have to deliver.
But expecting quality to improve indefinitely while refusing to fund those improvements doesn’t make much sense either.
Breaking the Pricing Discomfort Loop
I think the first step is recognizing what’s actually driving our pricing decisions.
Are we keeping prices where they are because that’s what the value of our service supports?
Or are we keeping them there because we’re uncomfortable finding out how customers might respond?
Those are two very different reasons.
The second is understanding what our current pricing allows us to build.
If our margins aren’t sufficient to keep improving the quality of our service, we need to recognize that. Because waiting doesn’t necessarily solve that problem. It may deepen it.
And finally, we need to connect pricing decisions to the kind of business we’re trying to create.
If higher prices allow us to invest in better delivery, then we should be thinking about how those improvements will create more value for our customers.
That’s how we begin reversing the pricing discomfort loop.
Not by raising prices without justification, but by recognizing that pricing and investment have to work together.
What Kind of Business Are We Actually Building?
I spend a lot of time thinking about the difference between building a business that produces income and building one that becomes a valuable asset.
And I think pricing is an important part of that conversation.
Because if the only way we can compensate for shrinking margins is to keep doing more work, we have to ask ourselves where that eventually leads.
More customers require more delivery. More delivery requires more resources. And if we aren’t earning enough to improve the business along the way, we’re just creating more work for ourselves.
That’s a difficult foundation for building long-term value.
The goal shouldn’t be to charge as much as we possibly can. It should be to charge appropriately for the value we’re delivering while creating enough margin to keep making that value better.
Because ultimately, the business we’re trying to build needs to be worth more than the income it provides us today.
And that brings us back to the question we started with.
What are we really afraid of when we avoid raising prices?
Losing a customer?
Having an uncomfortable conversation?
Or finding out that we haven’t built something people are willing to pay more for?
Those are legitimate concerns. But avoiding them doesn’t make them disappear.
The pricing discomfort loop allows us to put off the uncomfortable decision today while quietly making the business weaker tomorrow.
And I think that’s worth sitting with.
Because we can spend years protecting our customers from a price increase while slowly taking away the very resources we need to serve them better.
All because we were afraid to have a conversation.
Justin D Maxwell provides family office and investment bank services to the lower midmarket to founders who want 8 or 9 figure net worths. You can learn more here: www.justindmaxwell.com or take our free assessment here: https://fielding.global/articles/diagnostic.html