A common misconception in business and economic circles is that “uncertainty” is just an in-between phase—a foggy, lethargic, stumbling transition between the more defined market conditions like growth, recession, depression, or recovery. But as we illustrate in the Pricing for Profitable Growth training session, uncertainty is not a transitional state at all. In reality, uncertainty is a full-fledged market condition in its own right, with distinct rules, pressures, and decision dynamics.
In contrast to other market conditions that are defined by measurable external factors—like rising input costs, declining demand, shrinking GDPs, higher capital rates, or shifting competitive landscapes—uncertainty is primarily defined by a lack of clarity. It’s a condition where companies know they need to go somewhere, but don’t yet know what the landscape ahead looks like, let alone which paths might be viable. And because any possible route forward will come with its own set of risks, threats, and challenges, many businesses will simply choose to stay put.
It’s not unlike how animals respond to loud, unfamiliar noises. For example, when a cat doesn’t know which direction a scary noise is coming from, they’ll just freeze in place until they figure it out. And this makes perfect sense because otherwise, they could be running right into the threat instead of running away from it.
Similarly, when management teams are uncertain about which sets of challenges they’ll have to deal with moving forward, they’ll just hunker down and wait for the fog to clear enough to make sound decisions about the future.
They’ll pause major initiatives. They’ll delay capital investments. They’ll cut discretionary spending. They’ll focus on streamlining organizational structures and optimizing internal processes, rather than pursuing new market opportunities or developing new capabilities or competitive advantages. Simply put, they’ll go into a holding pattern. Not because they lack ambition, urgency, or vision, but because they lack clarity around what lies ahead.
And because the competition is likely to be hunkered down in the same foggy situation, the risk of choosing the wrong path forward looms much larger than the risk of staying put and potentially falling behind.
But as unique as these dynamics may be, there’s one aspect of uncertainty that really sets it apart from other market conditions: How it ends.
Remember that the genesis of this uncertain market condition is not so much economic, financial, competitive, or even external, for that matter. This market condition is all about management teams’ not having sufficient visibility as to the landscape ahead to feel confident making decisions about the path forward. Again, the landscape ahead doesn’t have to be particularly advantageous, or even good for that matter; it just has to be visible. This means that the only gating factor for this marketing condition is clarity.
And that can change in an instant.
The minute…the second…your management team feels like the fog has lifted enough for them to choose a path forward, they will make that decision, break out of the holding pattern, and step on the accelerator. And if you’re not prepared for that whiplash-inducing shift when it occurs, you can find yourself at odds with the new attitudes and imperatives.
So how should B2B pricing teams navigate this market condition? How do we avoid being blindsided or falling out of sync? Of course, the Pricing for Profitable Growth and Pricing Through Uncertainty training sessions explore a wide variety of strategies and tactics that others have found to be effective, including these fundamentals:
- Understand the Dynamics of Market Uncertainty
The more we know about this unique market condition…particularly how it ends…the better equipped and prepared we’ll be to effectively navigate the day-to-day with much less frustration and rework. - Make Today’s Decisions With the “After” In Mind
Avoid making short-sighted, expedient decisions that will hamper our ability to respond effectively when the fog lifts. We should strive to make decisions and focus on things that are “good” in any market condition. - Watch for the Shift and Be Ready To Contribute
When the shift happens, we won’t get six months advance notice. It will happen fast and have a lot of urgency behind it. Be ready to provide data-driven insights and make solid strategic recommendations.
Now, I know that just dealing with market uncertainty on a day-to-day basis can be so frustrating, challenging, and time-consuming that it’s hard to even think about what comes next. But history tells us that the fog will lift, the landscape ahead will be revealed, and a new path forward will be defined. And all of this will happen so quickly that we might need a neck brace.
So…like it or not, we have to be ready. Because if we’re late to that “next steps” or “new path” conversation, we could find that all of the most important decisions have already been made—very hastily and without the strategic nuance and insight that we could’ve provided.
Pricing for Profitable Growth
As the clouds of uncertainty begin to part there will be a massive push for revenue growth and market expansion. The challenge for pricing teams is to support the growth imperative while protecting profit performance.
Pricing Through Uncertainty
As pricing pros, we're expected to make weighty decisions with imperfect information. How do we "illuminate" the landscape a bit? What steps can we take to reduce the ambiguity, uncertainty, and risk?
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?
