CEO Tools Blog
PRICING for Impending Inflation
For August we turn 12-Seasons-of-Business to the question of inflation and how to handle it for your business.
Amazingly, the Consumer Price Index and the Producer Price Index have not skyrocketed, in many respects because we have actual deflation in some industries and hidden inflation in others. Wage rates are going up, but not employment, so the effect of inflation is softened by ongoing subtle productivity control. And of course, the offset of deflation in housing, construction and more has held things in check. But do notice that energy and food are up and going up, as are the "hidden" price increases in smaller package sizes for the same price, replacement new products (like the 18-volt cordless drill), and price-wording (like airline early-boarding fees that are just camouflaged carry-on baggage fees).
So following is a list of 34 ways you might look at and brainstorm to increase price...when or before you experience cost-creep from the hidden and visible inflationary trends:
After Charges (hotels)
Taxation (some hidden)
Flow Control (Delta
Estimating Creep (Ptg)
Add-Ons (during & after)
Good. Better, Best
Recovery Charges (rental cars)
Trade for Payment
Package Sizing (Triscuits
Segmented Pricing (Hilton)
There are many ways to pass cost increase along, but having options and ideas ahead of time allows you to be the pro-active leader rather than the reactive follower in your industry.
Have some fun by googling "stupidest fees" and you'll pull up the ten worst of 2011 and 2010 -- really amazing! Will probably help you decide what NOT to do...
Again, we hope these ideas improve your business success! Kraig