Putting Your Business First Is Not Putting Customers Last
Lately, I have spoken with several business owners who know their costs have increased but remain reluctant to raise their prices. Their concern is always the same: “My customers won’t accept it.” While that fear is understandable, continually protecting customers from necessary price increases can place the entire future of the business at risk.
A business owner must consider customers when setting prices, but the business must remain financially sustainable. If you do not put the best interests of your business first, there may eventually be no business left to serve those customers. Wages, rent, utilities, insurance, merchant fees and supplier costs rarely stand still. Expecting the business to absorb every increase indefinitely is not a viable pricing strategy—it is a gradual erosion of profit.
Customers are also often more understanding than business owners expect, particularly when increases are reasonable and the business continues to provide good products, service and value. Some customers may complain, but that does not necessarily mean they will leave. A modest, carefully planned price increase is usually far less damaging than cutting quality, reducing staff, neglecting maintenance or closing altogether.
A business that is responsible to itself first by increasing prices in the face of price pressures may well lose custom from patrons that are price conscious, but isnt it better to be profitable with 90% of the custom rather than working harder for that 10% and losing money?
Business owners who are unwilling to adjust their prices when circumstances demand it may find it increasingly difficult to remain in business. Pricing should not be driven by fear; it should be based on costs, value, market conditions and the profit required to operate successfully. Looking after the financial health of your business is not being unfair to your customers—it is what allows you to continue looking after them well into the future.
