In this interview, we delve into the remarkable career of Per Sjöfors, the Founder and CEO of Sjöfors & Partners, Inc., a consultancy firm renowned for its innovative approach to pricing strategies. Per shares his candid views on leadership, innovation, and the future of business, with a particular focus on why he strongly opposes the widespread adoption of dynamic pricing. Drawing from decades of experience, Per explains the pitfalls of dynamic pricing, its detrimental effects on industries like airlines and e-commerce, and the need for customer-centered strategies that prioritize sustainable growth and profitability.
A Critical Perspective on Dynamic Pricing
Per Sjöfors challenges the growing reliance on dynamic pricing in industries ranging from retail to travel. He explains that while dynamic pricing might promise optimized revenue in the short term, it often fails to deliver sustainable profitability. Per cites the U.S. airline industry as a cautionary tale: every major airline—except for Southwest Airlines—has faced bankruptcy at some point, in large part due to pricing strategies that alienated customers and eroded trust. International airlines have also struggled under similar models.
Per also highlights the case of Amazon, which uses dynamic pricing extensively but has achieved only a razor-thin profit margin of approximately 0.75%—after enduring decades of significant losses. For Per, these examples illustrate how dynamic pricing undermines the core principles of sound business: building customer loyalty, ensuring transparency, and maintaining sustainable profit margins.
“I’m largely an opponent of dynamic pricing,” Per asserts. “It often leads to a race to the bottom, where short-term gains overshadow long-term customer relationships and profitability.”
A Vision for Pricing Based on Customer Value
Instead of dynamic pricing, Per advocates for pricing strategies rooted in customer value and long-term business health. He believes businesses should prioritize understanding their customers’ needs and aligning prices with the perceived value of their offerings. This approach not only fosters trust but also strengthens brand loyalty—an essential factor in today’s competitive and globalized markets.
Per emphasizes that pricing strategies should be a deliberate, thoughtful process rather than a reactive one driven by algorithms. “Dynamic pricing may work in specific contexts, but for most industries, it creates instability and alienates customers,” he warns. “True pricing power comes from understanding what your customers value and delivering on that consistently.”
Foundational Principles of Leadership
As a leader, Per embodies a philosophy of thoughtful decisiveness. He avoids the pitfalls of following industry trends blindly, instead urging businesses to critically evaluate the long-term implications of their strategies. His leadership style is characterized by leading through example and taking calculated risks that align with his core values of transparency and customer-centricity.
One of Per’s key principles is resisting the allure of quick fixes. He stresses that businesses should not adopt pricing models simply because they are fashionable or promise immediate gains. Instead, he advocates for ethical decision-making and strategic foresight, which he believes are essential to building resilient, sustainable organizations.
The Ethical and Practical Limitations of Dynamic Pricing
Per also raises ethical concerns about dynamic pricing. He argues that the lack of transparency inherent in these models can harm customer trust and lead to dissatisfaction. When prices fluctuate too frequently or without clear justification, customers often feel exploited, which can result in increased churn and damaged brand reputations.
“Dynamic pricing algorithms treat customers as numbers, not people,” Per explains. “This dehumanized approach to business can have serious consequences for long-term relationships and profitability.”
He calls for innovation that genuinely improves customer experiences rather than exploiting them. For Per, ethical pricing is about creating value and fostering trust—not manipulating customers for short-term gains.
Innovation Beyond Algorithms
While Per recognizes the transformative potential of AI, he cautions against over-reliance on AI-driven pricing systems. He believes that human judgment and customer insights should remain central to business strategies. “AI can be a great tool,” he notes, “but it’s not a substitute for understanding your customers or building meaningful relationships with them.”
To stay competitive, Per encourages businesses to innovate in ways that reflect market trends and customer needs—not just technological capabilities. By focusing on ethical and sustainable practices, companies can avoid the volatility often associated with dynamic pricing models and instead cultivate stable, long-term growth.
Staying Ahead in a Competitive Marketplace
In an increasingly globalized economy, Per advises businesses to resist the commoditization of their offerings. He underscores the importance of creating consistent value and forging strong customer connections as the cornerstone of a sustainable competitive advantage.
“Dynamic pricing is not a differentiator—it’s a crutch,” Per says. “True differentiation comes from understanding your customers deeply and delivering solutions that resonate with them over time.”
Lessons from Leadership and Legacy
Reflecting on his career, Per highlights the importance of aligning business objectives with broader social values. From promoting diversity and inclusivity in hiring practices to fostering transparency in customer relationships, he believes that businesses have a responsibility to act ethically and sustainably.
Per’s legacy as a leader is centered on advocating for pricing strategies that empower businesses to thrive while maintaining the trust and loyalty of their customers. His Amazon bestseller, The Price Whisperer: A Holistic Approach to Pricing Power, encapsulates his philosophy of pricing as a tool for creating value rather than exploiting customers.
Advice for Aspiring Leaders
Per’s advice to aspiring leaders is straightforward: never lose sight of your principles. In a business world often driven by short-term metrics, he encourages leaders to take a long-term view and prioritize customer relationships above all else.
“Leadership is about staying true to your values,” he says. “Don’t be swayed by trends like dynamic pricing that promise quick results but come at a high cost.”
Looking Ahead
As Per looks to the future, he is optimistic about the potential for businesses to balance innovation with ethical considerations. He envisions a world where companies focus on creating lasting value for their customers rather than chasing fleeting profits through volatile pricing models.
In conclusion, Per Sjöfors’ journey serves as a powerful testament to the importance of principled leadership, ethical innovation, and customer-centric strategies. His unwavering commitment to transparency, value creation, and long-term sustainability offers invaluable lessons for business leaders navigating an increasingly complex and competitive landscape.
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