Are you grappling with the decision to increase your prices? It's a delicate balance, maintaining customer loyalty while ensuring business profitability. Let's delve into the factors that might indicate it's time to take that bold step.
4 things for brands to consider as inflation provides more opportunities for growth
Supply-chain bottlenecks and a tight labor market are increasing costs.
- For the first time in a long time, companies are thinking about raising their prices. But by how much? Enough to cover increased costs?
Think Expansively About Pricing
Consider the full range of opportunities now available to you
- Pass along costs to consumers and increase prices by 8 cents, or 10 cents
- 12 cents increase, or 15 cents increase?
- 20 cents increase and plow 3 cents back into discounts
Watch the Competition
What are others in your industry doing-or broadcasting that they will do in the future?
- Be hyperaware of what people are saying so you don’t get caught underpricing or overpricing other brands in your category
- Procter & Gamble is a company that has been extremely outspoken about its own plans
- Not all companies are being quite so transparent, but some are
Realize That Some Inflation Is Not a Bad Thing
Inflation gives flexibility to do a lot of things.
- Don’t be a hero and try to keep your prices static – there’s very little to be gained by not increasing your prices
- Consider an environment where you have more money to play with and a broader set of tools at your disposal for continuing to grow your brand
Move Sooner Rather Than Later
If you wait too long to increase your prices, you’ll be hit with rising costs without a corresponding increase in your own prices
- You’ve now got the opportunity to think about reinvesting in the brand
- Retailers and distributors have rules requiring advanced notice for price increases, and once they have notice, they might decide to fill their warehouses with additional inventory purchased at the lower price
