Why Sales Teams often undermine their own pricing
In many organisations, long-standing customer relationships are seen as a competitive advantage. Trust creates continuity, continuity generates stability, and stability is expected to deliver stronger business performance. Close relations also create a much better customer understanding and allow to create more value to the customer.
While this logic appears sound, it may also conceal one of the most overlooked risks in Key Account Management: self-imposed pricing concessions.
A recent article "How Sales Teams Undercut Themselves with Longtime Clients" highlights a pattern that many sales leaders will recognise. When contract renewals with long-term customers approach, sales teams frequently prepare discount scenarios, soften planned price increases, or offer special conditions before customers have even raised objections. The intention is positive: protect the relationship. However, the commercial outcome can be highly damaging.
This observation is consistent with challenges frequently seen in Sales Excellence and Key Account Management programmes: customer relationships are managed professionally, but pricing discipline is often applied inconsistently. Strong account relationships should create confidence in value conversations, not trigger premature concessions.
The real challenge is internal, not external
The assumption that loyal customers will resist price increases often becomes a self-fulfilling prophecy. Rather than testing the customer’s willingness to pay, organisations negotiate against themselves.
This behaviour is particularly common in mature Key Account Management environments where relationships have existed for years. Historical agreements, legacy discounts and region-specific exceptions accumulate over time. Eventually, pricing structures become more reflective of internal caution than actual customer expectations.
From a Sales Excellence perspective, this creates a significant challenge. Effective Key Account Management is not only about strengthening relationships. It is equally about protecting commercial value through structured account strategies, clear governance and disciplined execution. Many organisations invest heavily in developing strategic accounts, yet fail to systematically review whether commercial conditions still reflect the value they deliver.
Four questions every CSO should ask
Sales leaders should regularly challenge pricing decisions across their strategic accounts:
- Which discounts were granted without an explicit customer request?
- Which commercial conditions have never been reviewed after the original agreement?
- Are negotiation approaches aligned across regions and functions?
- How consistently does the sales team communicate value rather than price?
These discussions often uncover substantial opportunities for margin improvement without requiring additional sales volume.
Defending value as a growth lever
Many organisations focus their growth agenda exclusively on generating more pipeline. Yet one of the fastest and most profitable growth opportunities may already exist within the current customer base.
Stronger pricing discipline, value-based negotiation and transparent account governance can often create a greater impact on profitability than additional volume. The question for sales leaders is therefore not simply how to sell more, but how to protect the value of what has already been sold.
In modern Key Account Management, sustainable growth is achieved when trusted customer relationships are combined with the confidence to defend value, not just preserve relationships.
Source
How Sales Teams Undercut Themselves with Longtime Clients, Tatiana Astray, Harvard Business Review, published 6 May 2026.
Read the original article here: Harvard Business Review: How Sales Teams Undercut Themselves with Longtime Clients
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