The recent appearance of inflation in the economic data has spurred on price increases. With choruses of “welcome back” and “we’re returning to business as usual”, companies are charging more while offering the same or less as they did before the price increases.
While that may have worked in the past, today’s buyers expect more when prices go up.
How do leaders handle this? Pricing pressure is real. You are paying more to produce your product or service. Yes, it is totally appropriate to raise fees, but how you do this makes the difference.
At the heart of this is the price/value equation, which is part science, part perception. If clients know that they are receiving good value, they won’t question a price increase. On the other hand, companies that raise prices indiscriminately may discover that customers or clients will quietly walk away.
Here is a small example that someone shared. She attends a professional conference every year and saw an early notice for the upcoming event for next year. The price had doubled and the publicity for the event did not list any agenda or hint at what attendees would receive.
Certainly, the organization sponsoring the conference wants to make sure it makes money after the difficult pandemic era, but they fail in effectively promoting it because the value proposition is completely missing.
Compare this to what is going on in your company. If you are raising fees, please be mindful of the need to include a strong value message. Expectations are high and when you charge more and the perception is that you’re now offering more, the results could be damaging to your business.
Header image by Cottonbro at Pexels.