What potential risks or pitfalls does one need to know before starting a pricing overhaul?

1. Where to start! Here are some heavy hitters:
1. Enabling your team is as important as every other step of planning: Pricing and packaging is vital for your customer-facing teams to know and be resourced around. Usually, one training meeting isn’t going to cut it so make sure you adequately prep for that
2. Just because the change impacts a small % of customers doesn’t mean it won’t still be painful: I’ve been in situations where we’ve felt fine since we’re deprecating a feature that only his 1% of our customer base, only to realize they’re some of our best customers or to underestimate how much this will hurt the customer. You’re there to be the advocate in the room to make sure you’re unpacking who these customers are and what they need from you
3. Be clear in your plan for legacy customers: A lot of folks feel fine honoring legacy pricing because it’ll make the rollout easier, only to slow their engineers down by adding a ton of tech debt, missing key revenue targets, making rollouts a nightmare for GTM teams, or some combination of all three. Make sure the plan is clear and will work for the customer and for your org.
4. Don’t expect miracles: Cynical as this sounds, it’s super important to be realistic in knowing that you’ll still hear complaints about pricing, it won’t work for everyone, and your numbers might go down before they go up since your revenue engine has not been optimized for this new model, it takes time. Pricing is hard and there is no good pricing so an overhaul is great but it’s not going to fix every problem and that’s okay.

This will vary business by business based on your market position, your target customer profile, your go-to-market motion, and more.

But in general, I usually highlight a few areas of concern for folks to be aware of before they jump into a pricing project:

1. Don't do everything alone. Pricing touches almost all parts of the business, and it's important to form a cross-functional stakeholder group to help guide the pricing overhaul. You still need one person to hold accountability, but it's best when you share responsibility. Otherwise you may end up both overwhelemed with work, and with a plan that no one else in the organization is bought into.
2. Don't assume one size fits all. Your customers are diverse, and their pricing needs are diverse too. In order to successfully complete a pricing overhaul, you need to first understand which target customer you're pricing for. Spend time upfront refining your customer segmentation, and then focus all of your pricing research on the customer segments you want to win.
3. Don't forget to test and experiment. Because so much research goes into pricing, it can be easy to forget that pricing is both art and science. Don't assume that just because you have qual and quant insights, you know all the answers. Get your hypotheses out in the market as soon as possible so you can test how customers and the market will respond.