In The Parallel Lives, the ancient Greek writer Plutarch tells the story of Theseus. According to mythology, this king sailed to Crete, killed the Minotaur, and rescued the children of Athens.
Along the way, some of the boards in Theseus’ ships rotted, so the sailors replaced them. Eventually, they replaced every single plank so that not a single piece of the original ship remained.
That begs a question that has long intrigued philosophers: was the ships Theseus returned on the same ship he departed on?
The pricing strategy of Theseus
Your pricing team probably doesn’t spend a lot of time sailing. (Though if you do, we would love to hear about it!)
It’s pretty likely though that you have replaced some of the “planks” in your pricing strategy over time. Maybe a one-time exception became a standing discount. Or a threshold got raised “just this quarter” and never came back down. Perhaps a new product got shoehorned into the old pricing structure because nobody had time to design something fit-for-purpose.
Each change is defensible in isolation. But over a few years, the strategy has been completely replaced—plank by plank—without anyone making a conscious decision to change it.
If you replace every plank of your pricing strategy, is it still your pricing strategy?
How to spot subtle strategy shifts
The insidious thing about these swaps is that they are really difficult to spot. There’s no single moment where someone says, “Hey, let’s abandon our pricing strategy today.”
An announcement like that would lead to a lot of debate. You’d need to get everyone to agree before you made the change. But small, incremental replacements are nearly invisible.
If you’re not sure but think you might have unwittingly created your own pricing strategy of Theseus, here are some things to check:
- The value proposition plank — Is your pricing structure still related to your specific value drivers? Sometimes competitive pressure or slight changes in messaging can disconnect pricing from the value story it was once built on.
- The segmentation plank — /strong> Is your segmentation model riddled with exceptions and overrides? Sometimes companies try to keep using the same model through a market shift when instead they should go back to the drawing board.
- The discount discipline plank — Have your average discounts far exceeded what the strategy specifies? Sometimes a “one-time adjustment” becomes the standard.
- The competitive response plank — Are your pricing moves based entirely on what the competition does? Sometimes the strategy says “value-based pricing,” but the actual practice is almost purely reactive.
The solution may surprise you
Once you realize that your pricing practices have drifted from your stated strategy, you’ll be tempted to pull everything back in line. After all, if everyone sticks to the plan, things will go much better, right?
Wrong.
Your pricing needs to evolve. The danger is in unconscious evolution.
Instead of clinging to your strategy document no matter what comes, encourage your team to do regular strategy audits. Compare your actual practices against your plan. Where have things diverged? Was that divergence intentional?
Your pricing strategy can and should change over time. You just need to make sure that it’s changing in ways that benefit your business.
If you need to re-think your pricing strategy, we have some resources that can help. Check out Developing a Winning Roadmap for Pricing Success, Pricing Process Improvement, and Aligning Pricing to Business Strategy.
Remember that Ship of Theseus story? The philosopher Thomas Hobbes expanded it with a twist by asking what would happen if you collected all the discarded planks from the original ship and built a new ship out of them? Which one would be the original ship—the one made of all the replaced pieces or the one made of the discarded pieces?
That’s thought-provoking, but maybe a more practical question is which ship you would rather sail in.
Whether you’re talking about boats or pricing strategy, it’s not worth keeping old planks around just because they served you well in the past. But you do want to make sure any new planks are well designed to meet the current conditions.
Developing a Winning Roadmap for Pricing
From our research, leading pricing functions go through key evolutionary phases in becoming more effective and strategic. In this 3-part training webinar, learn how to develop a roadmap that streamlines that evolution with a plan to be a more valuable and strategic function.
Pricing Process Improvement
In this session, we discuss the critical differences between process types, how to use end-to-end process mapping for diagnostics and prioritization, pricing technology considerations, and common mistakes to avoid.
Aligning Pricing to Business Strategy
How do you ensure that your pricing and the overall business strategy are properly aligned? And what should you do when there's a disconnect?
