AI Is Helping Out: Should You Cut Prices?

 So many business decisions are being filtered through what impacts could they have on the brand. The brand is the meme of our times. 

So, the decision whether to reduce prices because of AI efficiency gains may seem not clear-cut, but dependent on the intangibles associated with branding. 

Consider these hypotheticals. Would law firms Cravath or Paul Weiss take dings to their elite status if they discounted M&A services performed with the help of AI? Or if Disney theme parks integrated AI project management and cut prices would that dilute the magic? Should the box office tickets for a film primarily created with AI be less than standard?

Price reductions can be experienced as discounting and that is usually perceived as a negative move. When a celebrity lowers the price for a mansion, media positions and packages that as a distressed situation. Is the celebrity on a downward spiral? Has the neighborhood encountered change for the worse? Sure, Walmart can provide rollbacks in pricing. Cucumbers are going for 64-cents instead of 84-cents. But that's Walmart, a discounter.  

Well, PwC has taken the bold step of lowering the price for its services because AI has changed how work is done. Time is being saved and time is money.

For small businesses a more concrete issue in the integration of AI is if a price reduction can be absorbed? It is customary to adjust fees for large accounts. Big clients actually expect that. And, that plays out okay. But an across-the-board lowering of fees could trigger the collapse of the enterprise. If that catches on in the sector, bloody price wars themselves can put you out of business. 

Another option in the era of AI is to leverage it to enhance the product or service, without raising the price. Getting more for the same price. 

Applied to being an employee an issue becoming common is this: With such a glut of talent you could be expected to work for less compensation. Should you? A growing number of my coaching clients are in that decision-making pickle. My advice? That could be a signal you should consider shifting into another way to earn a living.

Rattled by the uncertainty? Faith-based Career Coaching. Special expertise with transitions, reskilling and aging. Psychic/tarot readings, upon request. Complimentary consultation with Jane Genova (Text 203-468-8579, janegenova374@gmail.com). Yes, test out the chemistry.