When sales of a product or service fall, a response from professional executives may be to increase the price to compensate for the loss of revenue. Often such a strategy is used for products or services that heavily depend on brand equity.
The problem with such a strategy is that it is not sustainable, and the most loyal customers will eventually struggle to justify the cost. When that occurs, the product or service will fall off the cliff.
Shareholders should be wary that when sales fall but the revenue remains the same or increases, there may be an issue with the product or service, and the management has increased prices to mask the decrease.
The common reasons for product or service sales to decrease are that the evolution of the product or service has stalled or the standard has dropped. The common cause of this type of failure is that the organisation's mission has deviated from innovation and high standards to shareholders and profiteering. In such circumstances, the organisation will lose its innovators to competitors, and painful death will ensue.