The New CRO’s First Job Now is To Aggressively Raise Prices. Be Wary.

So we recently had a difficult renewal call with a vendor we have been working closely with for 5 years. We have been a case study on their website, referred numerous customers, and are among their top 5 largest customers. We even helped them launch a major product enhancement.

The renewal call was already going to be challenging, given the constant price increases in 2024. But this time, it was even worse: a new CRO was on the call.

“We’re doubling prices,” the CRO announced.

We questioned this decision, asking why the drastic increase. His response was “inflation” and that their costs are rising. We inquired if he was aware of our role as a reference account, to which he admitted he was still familiarizing himself with the business.

We questioned the fairness of doubling prices without warning, to which he replied, “It doesn’t matter.”

While this situation was unpleasant, it highlighted the aggressive approach of a new CRO focused on renewals and upsells in a company facing growth challenges. Their strategy involved targeting top customers for increased revenue, especially when new deals are scarce and pricing pressure is high.

The repercussions of this CRO’s actions on our business were significant:

• We have not yet renewed our contract.
• Immediately after the call, we contacted their competitor, with whom we hadn’t engaged in years. The CRO inadvertently initiated a competitive bidding process by attempting to double our pricing without negotiation.
• We are no longer willing to be a reference for this vendor.

While these tactics may benefit the CRO in the short term, the long-term impact on the vendor’s reputation and customer relationships remains uncertain.

It is crucial for businesses to stay vigilant and involved in their partnerships, especially when faced with aggressive sales strategies and short-term incentives that may compromise long-term relationships.

For a related perspective, read here:

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