Pricing Power vs. Volume Addiction: What Your Margins Say About Your Brand

The CMO sees a brand that's been 'premiumised': new visual identity, tighter positioning, cleaner architecture, big campaigns about trust and long-term value.

The CFO sees something else: five years of flat gross margins.

Revenue is up. Volume is up. The category looks healthy. But the line that matters, the one that tells you whether the brand is actually earning its keep, has barely moved.

This is where the conversation usually gets stuck.

Marketing talks about reputation, distinctiveness and loyalty. Finance talks about units, mix and price realisation. They argue about who's right.

They're both wrong.

Because in the end, there's only one test that matters for a 'value-led' brand in a complex category:

• Can you hold, or grow, margin when the market isn't doing you any favours?

If the answer is no, you don't have pricing power. You have a volume habit with a better story. And your P&L has been quietly telling you that for years.

You can learn a lot about a company's brand by ignoring everything it says about itself.

Forget the guidelines. Forget the manifesto. Forget the 'We're a trusted partner' copy on the website.

Instead, print the last five years of P&Ls, grab a pen, and look at three relationships.

1. Revenue vs. gross profit

First, put total revenue and gross profit on the same chart.

If revenue has grown faster than gross profit, something simple is happening: the company is getting bigger by pushing more units, often with heavier discounting or lower-value mix.

If gross profit has grown faster than revenue, something harder is happening: the company is improving the economics of what it sells. Better mix. Better price realisation. More of the right kind of business.

You don't need to be an analyst to see which story you'd rather be telling.

2. The direction of gross margin

Next, look at gross margin. Not quarter by quarter, over time.

A line that gently rises, despite macro noise, usually points to genuine pricing power.

A line that flatlines is a red flag. All the noise about 'premium' and 'value' isn't landing in the economics.

A line that slides is a neon sign: you are training the market to expect a deal.

If your brand story has shifted up-market while your margin line hasn't moved, the brand hasn't failed in the guidelines. It's failed in the field.

3. The language around the numbers

Then read how leadership explains those numbers.

Some companies talk endlessly about 'units, share, volume, keeping the top line moving.'

Others talk about 'mix, solutions, system value, total cost of ownership.'

One is confessing to a volume mindset, even if the brand deck says 'premium'. The other is at least trying to run a value-led play.

The trick is to read the P&L like you'd read any other piece of brand content: what is the behaviour telling you, regardless of the words?

Once you start looking at numbers this way, most companies fall into one of three camps. You'll recognise all of them.

1. The volume-addicted operator

You've met this business many times. Targets are set in units and top-line growth. The calendar is built around promotions, rebates and 'partner programmes'. There is always a special, a campaign, an incentive.

Whenever volume softens, the answer is predictable: another deal.

These are the brands that shout 'value' and whisper '50% off'.

The P&L tells the story ruthlessly:

Revenue edges up; gross profit follows more slowly. Margin drifts as more of the mix gets pulled into promo. Cost savings are surrendered back to the customer in the next negotiation.

Brand, in this world, is essentially a label on a discount engine. Its job is to get more people into the funnel so they can be converted with a better price.

In complex B2B categories, where buying cycles are long, implementation is involved, and switching costs should be high, that's a bizarre strategy. But it's common because volume looks good in the short term, and margin damage takes longer to be noticed. Success hides failure. 

2. The value-led brand

Then there are the quieter businesses that look unremarkable until you plot their gross margin. Their revenue doesn't explode. Their brand campaigns aren't always the loudest. They often describe themselves as 'boring'.

But their margins tell a different story.

Over time, they make a series of unfashionable decisions:

They walk away from unprofitable customers, even large ones. They hold the line on list price, knowing it will cost them some volume. They push mix towards higher-value systems and services, even when it makes the sales cycle more complex.

You see the result in a couple of simple places:

Gross profit grows faster than revenue. Margin holds or gently improves in tough markets.

When you dig into why, it's rarely because their logo is prettier. It's because they've built up advantages that matter: 

They've become embedded in how customers actually work. Their offer is integrated in ways that make switching painful. The people who recommend or implement their products trust them to be reliable and supportive. They have data to prove better economics over time, not just better features. 

Brand, here, is not a campaign theme. It's the sum of a thousand decisions that make customers more reluctant to switch, even when a cheaper option appears.

3. The confused majority

Most businesses, if they're honest, are here.

They have a brand platform that talks about 'premium solutions' and 'trusted partnership'. They have guidelines, a fresh identity, perhaps even a 'purpose'.

They also have:

Quarterly scrambles to hit volume. Undisciplined discounting via channel. Margins that go nowhere over time.

Sales know that if they push hard enough, head office will blink and approve an extra rebate.

Distributors know the list price is an opening suggestion.

Customers know that waiting pays.

Internally, brand loses credibility. Externally, the company looks like just another discounter in nicer clothes.

No one set out to build a confused brand. It's simply the result of strategy that lives in decks, not in the economics of the business.

So, which one of these are you?

If you want a painful but useful exercise, put your CMO, CFO and Head of Sales in a room with four things:

Five years of P&Ls. Segment-level profitability, if you have it. A list of your top 20 customers or partners. Your latest brand strategy.

Then ask some blunt questions.

What do the numbers say?

Has gross profit kept pace with, or outpaced, revenue?

Is gross margin drifting, flat, or rising over time?

Which segments look like 'big revenue, low profit' traps?

Those high-revenue, low-margin segments are usually where volume addiction lives.

What does behaviour say?

How often do price increases survive first contact with the field?

How many 'one-off exceptions' to discount policy were signed off last year?

Are sales incentives built on revenue or on profitable mix?

If you pay people to chase volume, you'll get volume.

Does the brand story match any of this?

Take your brand promise and hold it against the numbers.

If you say you are 'value-led' but your gross margins tell a commodity story, something is off.

If you say you are 'trusted' but you're constantly on promotion, what exactly are you training customers to trust?

This isn't about catching anyone out. It's about agreeing on what kind of business you are actually running.

In complex categories, pricing power looks mysterious from the outside. From the inside, it's brutally practical.

A brand earns the right to resist discounting because it does a few hard things consistently.

It gets embedded in the decision

The earlier you appear in the buying process, the stronger your position will be. If you're part of the spec, the standard, the approved list, or the default recommendation from the people customers trust, the conversation shifts from "Can you be cheaper?" to "How do we make this work?"

Brand work that reaches specifiers, advisors, and gatekeepers feels unglamorous. But it's often where your future margin comes from.

It behaves like a system, not a component

Single products are easy to substitute. Integrated systems are not.

If what you offer genuinely connects hardware, software, data, and support in a way that works together, it becomes harder for buyers to slice you up and replace parts with cheaper alternatives.

That doesn't happen by accident. It's a choice: to invest in making things work together, to build tools that make customers' lives easier, to design service models that reduce risk and complexity.

The more your offer removes friction, the less you have to argue about price.

It makes partners' lives easier

The people who recommend, install, integrate, or resell your products are ruthless pragmatists. They favour brands that are reliable, don't create problems, are predictable to work with, and stand behind what they sell.

If your brand is associated with fewer headaches and faster results, your price premium becomes rational, not charitable.

It proves value over time, not just at launch

Most "premium" stories stop at the product launch. Pricing power comes from what happens after: faster implementation, fewer failures, easier compliance, clearer documentation, simpler upgrades.

If you can quantify these advantages with real data, you can hold the line on price while competitors race to the bottom on unit cost.

That's brand strategy as economics, not as adjectives.

If you recognise your business in the volume-addicted or confused camps, the way out isn't another campaign.

It's a set of decisions that will make you unpopular in the short term and stronger in the long term.

Start with a list of things you know in your gut:

SKUs that never sell at full price. Customers that are always 'strategic' but never profitable. Channels that only respond to deeper and deeper deals.

Then answer the question nobody likes:

What are we prepared to stop doing?

You cannot become value-led while protecting every ounce of volume. Some of it has to go.

As long as salespeople are rewarded mainly for volume, they will behave accordingly.

If you want a different outcome, you have to:

Tie incentives to gross profit and mix, not just top line. Put guardrails around discounting that actually hold. Celebrate the deals you walk away from, not just the ones you win.

This is where most 'premium' strategies quietly die: in a compensation plan and a set of approvals that never changed.

Price discipline without a stronger value story is just wishful thinking.

Brand and marketing have to do more than redesign the logo:

Build the case that justifies holding the line: proof points, data, case studies, tools. Arm the front line with real arguments: calculators, comparisons, stories that resonate with pros and buyers. Ensure every campaign ladders up to a simple point: this is why we are worth what we charge.

The job is not to make the brand more aspirational. It's to make the pricing feel inevitable.

Expect the dip—and own it

If you reset your approach to volume and price, there will be a dip. Some customers will leave. Some deals will disappear.

That isn't a sign the strategy has failed. It's the first visible sign that it's real.

The question is whether leadership can calmly explain:

How lower volume and better margins produce a stronger business over 12–24 months. Which metrics matter now: gross profit, margin by segment, mix shift, promo dependency.

If the first wobble sends you running back to rebates and fire-sale deals, the organisation learns the lesson instantly: we don't actually believe in value; we believe in the quarter.

What this means for brand leaders

If you work in brand, this can sound like someone else's problem. It isn't.

In the markets that Good works in, large, complex organisations trying to move from legacy to long-term value, brand strategy and capital strategy are the same conversation.

The uncomfortable implication is this:

If you can't talk about margin, you will be ignored where decisions are made. If your strategy doesn't show up in the economics, it isn't a strategy. It's a story.

The fix is straightforward, if not easy.

Sit with finance and understand the last five years of gross margin properly. Map where your strongest brand assets actually sit in the portfolio and which segments they affect. Agree what 'value-led' should mean in numbers, not just in words.

Then build brand work that changes behaviour: what you sell, who you sell to, how you price, and what you're prepared to walk away from.

Because in the end, the market doesn't care what you call yourself. At the end of the year, your brand is not what your guidelines say it is.

Your brand is what your margins say it is.