In a recent YouTube video titled "Why Your Sales Team Fights Price Increases (+ How to Win)," Akhil Gupta, co-founder of Monetizely and pricing expert, addresses one of the most common tensions in SaaS pricing: resistance from sales teams when it comes to implementing price increases. The video provides a comprehensive framework for resolving this conflict using both data and empathy to align sales objectives with company profitability goals.
The Natural Tension Between Sales and Pricing Strategy
The conflict between increasing prices to boost profitability and maintaining lower prices to support sales velocity is practically universal in SaaS companies. As Akhil points out early in the video, "This tension between increasing prices to boost profitability and keeping prices low to maintain sales velocity is practically universal."
When CEOs or leadership teams suggest price increases, they often face immediate pushback from sales leaders with concerns about hitting targets. This resistance isn't unreasonable - sales teams are evaluated primarily on closing deals and hitting revenue goals, so anything that creates additional friction naturally causes concern.
However, Akhil notes an important insight: "This conflict is often based on assumptions rather than data." Instead of engaging in opinion-based debates, successful SaaS companies address pricing tensions through structured analysis and clear communication strategies.
Start with a Data-Driven Approach
Before deciding on pricing changes, it's essential to establish an objective foundation with concrete data:
Calculate Your Break-Even Point
One of the most powerful analyses is determining how many deals you can afford to lose while still maintaining revenue targets:
"Calculate how many deals you would need to close at a higher price point to achieve the same revenue. For example, if you increase prices by 20%, you could theoretically lose up to 16.7% of deals, and still generate the same revenue."
This break-even calculation creates a clear threshold for measuring success and helps transform emotional concerns into objective business metrics.
Analyze Your Win-Loss Data
Sales teams often cite pricing as the reason for lost deals, but the reality might be different:
"In our experience, when companies conduct rigorous win-loss analysis, they often discover that price is cited as a convenient excuse rather than the actual reason deals fall through."
Understanding the true reasons customers choose not to purchase your product provides critical context for pricing decisions.
Examine Discounting Patterns
Current discounting behavior reveals valuable information about pricing flexibility:
"If your sales team routinely discounts by 30 to 40%, you have room to increase list prices while maintaining effective prices."
High discount rates often indicate that your list prices don't reflect the true market value perception of your solution.
Implementation Strategies That Minimize Sales Disruption
After establishing the data-based foundation, successful price increases typically follow a phased approach:
Begin with New Customers Only
"Start with new customers only. This preserves the existing pipeline and lets your sales team get comfortable with the new pricing on fresh prospects who have no pricing expectations."
This approach creates a clean transition without disrupting deals already in process, giving sales teams time to adapt their strategies.
Create a Thoughtful Transition for Existing Customers
Customer expectations around pricing predictability must be respected:
"Customers wanted repeatable, consistent pricing that mapped to the budget they already had in place. Respect this by giving advance notice and perhaps grandfathering existing rates for a period."
Clear communication and respect for existing customer relationships build trust during pricing transitions.
Test Before Full Implementation
"Test the new pricing with a subset of sales reps or territories before rolling out broadly. This creates internal case studies you can use to convince the broader team."
These internal case studies serve as powerful proof points when scaling the new pricing approach across the entire sales organization.
Providing Sales Teams with Support During Transitions
Addressing sales teams' legitimate concerns about meeting targets requires tangible support mechanisms:
Create Financial Incentives
"Consider temporary spiffs or incentives during the transition period to make it financially advantageous for the reps to sell at the new prices."
These incentives align individual compensation with organizational pricing goals.
Adjust Targets Temporarily
"Adjust quotas temporarily to account for potential longer sales cycles or lower volume as the team adapts to the new pricing."
Acknowledging the potential short-term impact demonstrates leadership's understanding of sales realities.
Establish Clear Escalation Paths
"Create a clear escalation path for exceptional circumstances. Your sales team should know that they have recourse for truly competitive situations where pricing flexibility is absolutely needed."
This safety net gives sales confidence that they won't lose strategic deals while maintaining pricing discipline.
Enhancing Value Proposition Alongside Price Increases
Price increases become more palatable when paired with enhanced value:
"Pair price increases with new features or capabilities that justify the higher cost."
Additional value helps sales teams maintain a strong narrative when explaining pricing changes to prospects.
GitLab's approach illustrates this balanced strategy:
"When Scott Williamson led their pricing transformation, they enhanced their free tiers significantly while also introducing higher price packages with clear value differentiation. This balanced approach maintained market adoption while boosting revenue."
Empowering Sales with Strong Messaging
Price increases ultimately represent a communication challenge that requires preparation:
"Create battle cards specifically addressing pricing objections. Train the team on value-based selling techniques rather than feature-based selling."
Through this approach, sales teams shift from defending prices to confidently articulating value.
A Practical Implementation Example
Akhil provides a concrete example of how these principles might work in practice:
"Imagine you're planning a 15% price increase. Here's the approach: Run the analysis showing that even if win rates drop by 13%, you will maintain the same revenue. Share this with the sales leadership. Propose implementing the new pricing for new customers only, starting next quarter, giving the sales team time to prepare. Offer a three-month spiff where reps earn an additional 5% commission on deals closed at the new pricing."
This structured approach balances immediate sales concerns with long-term revenue goals.
Treating Sales as Allies, Not Obstacles
The most successful pricing transformations view sales teams as essential partners:
"At Monetizely, we've found that the most successful pricing changes happen when companies treat their sales teams as allies in the process, not obstacles. Involve them early, address their concerns directly, and arm them with the tools they need to succeed."
This collaborative approach recognizes that sales teams ultimately must believe in the new pricing before they can effectively sell it to customers.
Conclusion
Successfully implementing price increases in SaaS companies requires navigating the natural tension between sales velocity and profitability. By using data-driven analysis, phased implementation approaches, sales team support mechanisms, and enhanced value communication, companies can achieve pricing transformations that benefit both immediate sales concerns and long-term business objectives.
As Akhil concludes, "The goal is not to force pricing changes despite sales objections, but to create alignment around a pricing strategy that works for everyone." This balanced approach transforms what could be a divisive organizational conflict into a strategic advantage that drives sustainable growth.