The instinct when growth slows or churn ticks up is to look at pricing as the lever. Maybe the product is too expensive. Maybe a price cut would unlock a new cohort of customers. Maybe a discount would save the renewal.
Sometimes this is right. More often, it's the wrong diagnosis applied to the wrong problem.
Hold your price when:
Churn is about feature gaps, not price. If churned customers cite missing features or poor performance as primary reasons, cutting price won't fix churn — it just reduces revenue per retained customer. Fix the product first.
Your best customers haven't complained about price. If your top 20% of customers by ACV have never pushed back on pricing, your pricing isn't the problem. The customers complaining are often the least profitable ones.
You're competing with a cheaper inferior product. Cutting price to match a product that delivers half the value trains the market that your product is only worth the lower price. Hold, differentiate on value, and let the quality difference play out over renewals.
Cut your price when:
You're priced out of a viable market segment. If there's a clear customer segment that would use your product but can't afford the current pricing, and serving that segment is part of your strategy, price to serve them. The revenue from that segment may not be in your current model.
You're losing deals consistently at a specific stage. If your win rate against a specific competitor is low and the decision most often comes down to price, you may be mispriced for that competition tier. Adjust.
Your cost structure has improved. If AI and automation have reduced your cost to serve significantly, passing some of that improvement to customers through lower prices can drive retention and expansion that more than offsets the margin reduction.
Price discipline isn't about never cutting. It's about cutting for strategic reasons, not emotional ones.