Should we raise prices 15%?

Cerno is a private AI boardroom that runs consequential decisions through a structured process and returns a brief like the one below. This example is illustrative; your own would reflect your margins and customer base.

How this brief was reached

The advisors formed independent positions, a Devil's Advocate challenged the leading one, and the vote landed 4–1 in favour — with the Customer Advocate's dissent kept on the record. The Chairperson's recommendation isn't just "yes": it's how to do it, because the staging is what converts a risky one-way move into a reversible test. Confidence is solid but not high, reflecting genuine uncertainty about elasticity.

The staging does two things at once. It gets the new price in front of new customers immediately — where there's no relationship to damage and no expectation to reset — which produces real elasticity data within weeks. And it gives existing customers notice and a window, which is the difference between a price rise and a nasty surprise.

The CFO's dissent was not adopted but shaped the actions: staging does delay revenue, and the segmentation exercise in week one is how you find out by how much.

What the board weighed

Twenty-six months of not deciding is a decision. Holding a price through rising costs is a choice to absorb them, and six points of gross margin is what that choice has cost. The board treated the status quo as the risky option rather than the safe one — a framing most owners find uncomfortable and few dispute once it's stated.

Not all customers are the same customer. The action to segment by margin and tenure comes before the rule, not after it, because a flat 15% applied to everyone treats the customer who's been paying full price for two years exactly like the one negotiated down at the start. The second is where both the margin problem and the churn risk are concentrated.

Second-order effects run both ways. The obvious one is churn. The less obvious one is that a business which never raises prices teaches its customers that prices never rise — and teaches its own team to compete on price, because nothing else has been tried. The board weighed the cost of not moving as a genuine second-order effect, not a rhetorical one.

Notice is the whole difference. Sixty days and a grandfather window cost some revenue. What they buy is that nobody finds out from an invoice. Customers who leave over a price rise they were told about are customers who were leaving; customers who leave over one they discovered are customers you lost.

If your situation differs

If your costs haven't moved, this is a positioning decision rather than a margin recovery, and the case has to be about value rather than necessity. That's a harder argument and usually wants proof — new capability, better outcomes — alongside the number.

If you're heavily concentrated in a few large accounts, the staged approach matters more, not less, and the conversations should be individual rather than a notice. A 15% rise announced by email to a client who is 30% of revenue is a decision about that client, not about pricing.

If you've discounted broadly in the past, the grandfather window gets complicated: you'll have customers at several different prices with no clear logic. Fix the structure first, then raise — otherwise the rise exposes the inconsistency and every customer becomes a negotiation. The cheapest-tier brief covers the structural version of the same problem.

The frameworks behind it

This decision turns on second-order thinking — what customers and competitors do after the rise — and on reversibility: staging is the move that keeps a one-way door two-way while you learn.