even bagels aren’t immune to the recession
Just the other day, I encountered a sign on the counter of my local Panera Bread. It announced price increases on its bagels due to increased costs.
I’m sure many businesses faced with increased margin pressures are looking at price increases as a way to offset some of their costs – but they fear angering loyal customers and losing business when they need it most.
It is possible to maintain good customer relationships – and perhaps even to generate additional equity — while taking a price increase. As with all business decisions, make the change using the brand as a guide.
Here’s some specific advice:
- DO: be authentic – inform your customers why you’re increasing prices – people appreciate businesses that serve them with honesty and integrity
- DON’T: make the increase the primary message – use small signage if you’re a retail businesses or a small alert on your homepage if you’re online – keep the focus of your communication on the great value you provide and your key brand differentiators
- DO: run strategic offers and promotions – make price increases more palatable by creating bundled offerings with value-added services or add-on products that increase the value perception
- DON’T: resort to gimmicks – for example, don’t just repackage your products into smaller quantities to offset the price increase – today’s savvy customers will resent you for thinking they wouldn’t notice
- DO: give customers some relief – consider keeping one or two core products at their regular price – margins on these products might suffer more but the goodwill you build for your brand will payoff in increased loyalty
- DON’T: exacerbate the pain – just like slowly peeling off a band-aid, taking a bunch of small price increases over a short period of time hurts worse than doing it all at once – you want to get the focus off of price as quickly as possible
Pricing — and your strategies and policies to determine it – are a key touchpoint for the brand. Viewing price through the brand lens is one example of “brand-as-business.”
Any other do’s or don’ts?