How do You Handle Your Price Increases?

For some time now, I realized that the best way to start the day in the morning is with a cup of hot coffee and reading the comics page of the daily newspaper.    Instead of the Front Page which is constantly filled with sensationalism and bad news, I find happiness and laughter with the comics.    As I now spend more time with the comics, I have discovered so much inspiration from this form of communication.    While funny, they all carry a message and themes which are abundantly clear.   There are reminders every day in the comics about our lives and careers.   To no surprise, I have been getting a lot of inspiration for my blog from the comics.

Here is one that reminds us of sales and marketing principals.  When I read this, I laughed and relived numerous sales meetings that I have led during my career where we reviewed lessons learned.   While we discussed finalized business, and new opportunities and challenges, we always reminded ourselves how we go out and get new business. 

I recall one meeting where we discussed the proverbial (and most difficult) topic of pricing.  In business, raising price is inevitable.  It is part and parcel of how any business grows and matures.   There are many reasons to raise prices of which making more profit is only one.   Businesses deal with rising costs and raising price is more often to combat these costs rather than to just make more money.   Anyone who has managed a business understands this.    However, to the customer, price increases are seldom regarded positively.     

Price increases are inevitable, but timing is important to maintain support and loyalty from customers.  

The consumer is smart and understands business.   We have always believed that pricing is justified by the product and value provided, i.e. the value proposition.   Price increases should come with added value, an improved product, or additional products and of course improved service.  Successful leaders hammer home the value proposition in any business.  People buy value, either real or perceived.    

As we plan for price increases, we plan for offering more value.   At Ocean Park, raising the price always coincided with the introduction of a “new” product, attraction, or service.   This raises the value to the customer to support the new pricing.   

Price increases were never arbitrary but timed to be able to offer more to the customer. 

Successful leaders tell you that price increases cannot be avoided.  It is best to develop a pricing strategy which will include providing more value to the customer to support a price increase.   How do you handle your price increases?