MANAGEMENT TIPS
RETHINK YOUR PRICING AS INFLATION R ISES When your costs go up, raising prices can feel like the obvious next step—but if those increases drive customers away, your business could collapse. Before you pass along rising costs, consider these four approaches. Be selective about increases. You could absorb some costs to preserve sales volume. Use targeted discounts to retain price-sensitive customers and explore spreading increases across products instead of concentrating on the hardest-hit offerings. Adjust your products. Offer bundles that encourage additional purchases. Introduce a stripped-down version for customers on tighter budgets. Add a premium option whose profits can help support other offerings. Make future prices clearer. Tie changes to objective data, allowing prices to fall when the index does. Offer longer contracts with smaller annual increases in exchange for customers’ commitment. Match customers’ budgets. Consider monthly payments or leasing to make purch...
