Impact Pricing · 28 Sep 2026 · From the week of 28 September
How to Raise Prices When Everything Is Getting More Expensive with Jacob Moller Korsgaard
These are notes on the conversation, checked against its transcript. The episode itself has the full discussion.
In brief
Mark Stiving interviews Jacob Moller Korsgaard, Director of Pricing at Danfoss, who leads global pricing for Danfoss Climate Solutions and has spent 15+ years in B2B pricing. They cover how to raise prices when costs such as raw materials, freight, fuel and tariffs spike quickly. Topics include pricing cadence, contracts that lock in prices, whether inflation-driven increases are just cost-plus, leading versus following competitors, global versus local decisions, communication, and AI in pricing. Jacob's main argument is that annual price reviews are over. B2B companies should prepare for more frequent adjustments, run them on an agreed calendar, fix contract inflexibility, and focus on disciplined execution so increases flow through channels to end users without disrupting the market.
For founders
- Jacob argues that annual price reviews no longer work when costs move in weeks, but that B2B companies selling through channels should not jump to fully dynamic pricing either; increases need to be forwardable through wholesalers to end users.
- Jacob favours an agreed pricing calendar with a fixed number of adjustment slots per year, so customers know when increases are coming and internal processes can be built around it.
- Price increases cannot land if a large share of revenue is locked in contracts. Jacob gives the example that if 50% of revenue is bound in contracts, repeatedly pushing increases makes no sense, and says contract terms must be made more flexible first.
- When the whole market faces the same cost pressure, Jacob and Mark Stiving argue for leading the increase and letting competitors follow, though Mark adds this is much harder for small companies.
- Jacob says AI in pricing depends on good master data and still needs human commercial judgment, because it extrapolates from existing data and can make you efficient at doing the wrong things.
For revenue leaders
- Jacob reports that sales pushback on price increases themselves has largely faded since COVID; most pushback now comes when increases ignore contractual terms or create administrative burden for customers.
- Jacob's team in the global pricing function supplies a generic lead-up and communication for price increases, which local markets then adapt, aiming for direct, honest and consistent messaging.
- Mark Stiving says local teams often claim their market won't accept a price, when in truth it will and they just don't want to deal with the increase.
- Jacob says COVID taught his organisation that under special circumstances you can raise prices much more than you think.
- Jacob says that, in his opinion, global pricing should hold more discussions with regions, and he admits to having overruled local decisions that probably would have made better sense.
What was said 19, most useful first
Jacob personally favours an agreed pricing calendar with a fixed number of increase slots per year over reacting every time costs move. Listen
He says Danfoss is actively debating cadence internally: some argue for recovering costs immediately when they hit. His personal view is that a calendar, which can differ by industry, gives customers predictability and aligns internal processes instead of keeping them constantly reactive. He presents this as his own opinion, not a settled company policy.
“for me personally, I think the idea of a calendar which can look different from industry to industry makes a lot of sense because then you can ensure that your internal processes are more aligned as opposed to constantly being very reactive to the changes that are bound to happen.”
Price increases cannot reach a high implementation rate while a large share of revenue is locked in fixed-price contracts. Listen
Jacob says contracts with terms such as a four-month notice period or a two-year price period conflict with a pricing calendar. He gives the example that if 50% of revenue is bound in contracts, pushing increases repeatedly makes no sense. Companies should make consistent changes across their contract database to gain flexibility. Mark Stiving adds that renewal time is the moment to change contract terms so you don't get stuck again.
“If we know that 50% of our revenue is bound in contracts, we cannot change them. So we need to get that done before we can have a high implementation rate.”
Inflation-driven increases are not purely cost-plus, because sustained cost inflation eventually shifts customers' value perception. Listen
Responding to Mark Stiving's challenge that this sounds like cost-plus pricing, Jacob concedes it is cost-plus 'to some extent'. He argues that large cost increases will change perceived value, maybe a bit later, even if customers don't accept them at first. He uses the analogy that people forget what milk cost three years ago, and says companies need to connect cost increases to their value-based pricing logic.
“it is going to change the perceived value maybe a bit later. Maybe customers will not accept it in the beginning.”
What drives buyers is price relative to competitors, so when all competitors face rising costs you should lead the increase rather than call it cost-plus. Listen
Mark's defence of inflation-driven increases is that buyers choose between you and a competitor, so the relative price matters, not the absolute price. If everyone's costs have risen, someone will lead an increase, so it might as well be you. Jacob agrees that with everyone hit roughly equally the door is open to move quickly and let others follow, especially for a market leader.
“Our costs have gone up our competitors costs have gone up and one of us is gonna lead a price increase So we might as well lead it.”
When a whole market is hit by similar costs, a market leader can move first and let competitors follow. Listen
Jacob notes local production footprints mean companies are hit somewhat differently, but in totality everyone is affected. That opens a window to make price adjustments quickly, particularly from a market leader position. Mark Stiving qualifies this: leading increases works if you're big enough, but is really hard for a small company.
“So there is a door open to do your price adjustment, do them quickly and let the others follow, especially if you are in a market leader position.”
He would probably raise his own price if competitors had to raise theirs because of tariffs, even without facing tariffs himself. Listen
Mark notes tariffs hit competitors unevenly depending on where they manufacture and sell, which shifts competitive dynamics. If a competitor must raise prices due to tariffs, he would probably follow. Jacob agrees this is largely what is happening.
“if my competition has to raise their price because of tariffs, I would probably raise my price too, even if I don't have the tariffs.”
Local teams often claim their market won't accept a price when in truth it will. Listen
Mark says that when he worked with local organisations to raise prices or hold a price point, he got the same pushback as from salespeople. In his view the real reason is reluctance to deal with the increase, not market resistance.
“It's like, no, no, no, my market won't take that. And in truth, they will, they just don't want to deal with the price increase.”
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Regular annual price increases teach customers to expect them. Listen
Mark contrasts semiconductors, where annual price decreases were the norm due to yields and pressure, with a life sciences company that raised prices every year. Once customers get used to annual increases, he says, they accept them as the way the world works.
“We get to teach our customers that we raise prices every year.”
Jacob warns that without structure, AI makes teams efficient at doing the wrong things. Listen
Mark Stiving noted that AI is often wrong on topics he knows well, yet he tends to trust it on topics he doesn't. Jacob responded that this is the risk to guard against: without structure, AI creates havoc.
“it can really make you efficient in doing the wrong things. So if we don't have structure, it's just going to create a havoc.”
When costs change week to week, teams can recalculate endlessly; fixed dates force action. Listen
Jacob notes that with week-to-week cost movements, waiting a week and recalculating can give a different answer, so teams keep recalculating instead of acting. He argues for agreed dates for each step so the organisation and market can follow and a solid process can be installed.
“if you wait one week and do the calculation again, you might come to a different result. So you keep on calculating until but you know, you need to act.”
A tariff disadvantage from importing is partly offset by inflation in the importing market, leaving room to raise prices. Listen
Using the US as an example, Jacob says that shipping product in from China versus a local producer creates an extra cost and a competitive disadvantage. Internal US inflation partly evens this out, so there is still room to work on price. He adds that tariffs are also a supply chain issue, and Danfoss has moved its production footprint in response.
“there is also an inflation internally in the us so it's gonna be partly even out so still still there's a room to work on the price.”
Danfoss communicates price increases directly and consistently from a central template, which local markets adapt. Listen
Jacob says the global pricing function gives the business the tools and processes needed, including a generic lead-up for a price increase. Each market then localises it with its own specifics. To the extent possible, the company communicates the same way and is open about what it is doing.
“to the extent we can, we try to communicate as a company in the same way and be very open on what it is we do.”
Global pricing should consult regions more, and admits he has overruled local decisions that probably made better sense. Listen
Jacob declined to describe Danfoss's actual global/local decision rights. In his opinion, the best approach would involve more discussion with regions, which have a better feel for the market. The global function must balance cost pressure against market conditions, deciding where to listen more and where to simply decide.
“there is no doubt that in my time I have also overruled some things locally that probably would have made better sense.”
Sales pushback on price increases has largely faded; it now comes mainly from ignoring contract terms or creating customer admin. Listen
Ten years ago everyone pushed back on proposed increases. COVID showed that in special circumstances you can raise prices much more than you think, and recent cost spikes have made the need widely understood. The remaining pushback arises when contractual terms aren't respected or increases create administrative work for customers, so the focus should be on timing and clear communication.
“where I get most pushback from salespeople is that if we are not respecting the contractual terms or doing something that gives a lot of administration for our customers, for example.”
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COVID showed that in special circumstances prices can be raised much more than companies expect. Listen
He cites this as one of the lessons from COVID that changed internal attitudes toward price increases at his company, alongside recent cost spikes.
“one of the things we learned there was that there are special circumstances where you can raise the prices a lot, much more than you think.”
Good master data is fundamental to making AI work in pricing, and AI still needs human commercial judgment on top. Listen
Danfoss has built a system that helps sales teams work smarter, has more advanced analytics, and is building its own pricing software with AI embedded to help users set the right prices. Jacob says AI is very good at using existing data and extrapolating from it, so humans must control it and add commercial judgment it cannot generate itself.
“we have quite good master data which is really fundamental to make AI work.”
Jacob's main advice is to prepare for more frequent price adjustments and invest in execution processes and tools to secure margins. Listen
Jacob advises companies to get ready for more frequent adjustments while maybe not doing them too often if avoidable, and to lead increases. He stresses having processes and tools in place to implement efficiently, so margins are secured and the market isn't disturbed more than necessary.
“we need to be prepared for doing more often price adjustment and we need to focus on the execution part so we implement it efficiently and get our margin secured because that is gonna be key now”
Annual price reviews are no longer adequate, but for B2B companies selling through channels the answer is not fully dynamic pricing. Listen
Jacob Moller Korsgaard (Director of Pricing, Danfoss) says costs for raw materials, freight, fuel and tariffs have risen quickly and dramatically over the last two years, so companies must react fast and efficiently. In B2B, increases have to be forwarded to wholesalers so they can pass them on to their own customers. He calls for a sequence that lets increases flow through to the end user without creating chaos in the market each time.
“So the good old days with an annual price review is definitely gone. But for many companies, the answer is not to have a full dynamic pricing.”
Pricing teams need commercial judgment: an understanding of customer processes, channels, segmentation, IT and finance. Listen
Jacob defines commercial judgment as getting close to the commercial side so pricing supports, rather than conflicts with, how the business operates. That includes product, packaging and sales channels, where he notes distribution and OEM differ significantly. He says it is rare to find people who understand both the commercial side and the IT and financial landscape, and pricing can bridge them.
“There's often a big difference between working through distribution or OEM.”