How Do I Raise Prices Right Now Without Losing Jobs?
One of the most common questions business owners are asking right now is this headline. They’re not saying it very loudly, of course. It might be coming to them in the middle of the night, when they’re thinking about their recent numbers.
Costs and labor prices are getting higher. Trucks, materials, and insurance are all going up. But despite this, it still feels risky to raise prices. The horrible question remains: what if the phone stops ringing?
It’s a logical fear, but it’s also based on a misunderstanding of how customers actually decide when to go forward with a purchase.
Misdiagnosed Price Resistance
Business owners assume price resistance is about money, but it isn’t usually. A customer might say no to something, but the reason is usually because they don’t believe the risk is worth it yet. And when belief is low, they might use price just as an excuse.
This is why two companies can charge very different prices in the same market and both stay busy: one can be trusted, while the other is just tolerated. This distinction matters more this year than it has in a long time.
Avoiding The Fork In The Road
There are really only two sustainable positions in the market:
Be the low-price leader
Charge more to make the customer’s life easier
Though both of these can work, it’s particularly difficult right now to try to exist between these two poles. Though the middle sounds reasonable and flexible, it’s also the most dangerous place to be because middle-of-the-road businesses get compared to others more than those at either pole. They aren’t cheap enough to win business based on price, but they also aren’t quite trusted enough to win for their convenience. So instead they get negotiated with and questioned, and the customer shops around.
These businesses feel the most pressure when costs rise.
Raising Prices Without Losing Volume
Our clients tend to commit to being the easiest option to choose and work with. They try to give their customers clear expectations and good communication, with a calm presence. No surprises. They also try to be consistently visible, and they don’t use ever-changing marketing tactics that confuse the public and leave them explaining themselves differently every quarter.
For our clients, the phone doesn’t stop ringing, even when prices go up.
It happens because customers are buying relief from uncertainty, hassle, and regret. This is what it means to be easy or convenient.
The Other Side Of The Fork
Occasionally we do also work with clients who lean into being the low-price leader. They run tighter operations with simpler offerings, and they accept thinner margins.
They don’t pretend to be someone they’re not. So they don’t give mixed signals or half-premium language. There are no apologies for what they’re selling, and customers come in knowing exactly what they want. There tend to be fewer price objections because price is the whole point of these businesses.
Why The Middle Fails (Especially Now)
The middle fails because it forces customers to decide between the expensive convenience price or the no-frills, doesn’t-get-cheaper price. But customers don’t want ambiguity: they want to feel safe making the best decision they can for themselves.
If you aren’t clearly cheaper or clearly easier, the burden shifts back to the consumer, and that’s when they start to hesitate and make comparisons. It’s here where discounts start getting requested.
Raising prices from the middle hurts because there’s often no story to support it.
What To Do Before Touching Price
Before you change anything, ask yourself if you’re trying to win customers on price or convenience. Then, try to determine two more things: 1) if a customer would describe your business as “simple and reassuring”, and 2) if your message is consistent enough that people feel familiar with you.
If the answer to any of these queries is unclear, you know where you’ve got to do more work.
A Final Thought
Don’t raise prices right now if you’re not sure how you’re trying to sell to your audience. Pick a lane: either be the business people call to save money, or be the business they call to save time and stress.
Just, at least right now, don’t try to operate between these two areas; that’s where the most effort produces the least reward.
If you have questions or want to discuss what it can look like to take your business to the next level by accumulating trust, not discounts, you can book time on my calendar.
