Raising Prices Post-Pandemic: An Opportunity to Discuss Value

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As the vaccinated population increases, restrictions on businesses are easing. Many companies are considering revised mask requirements, vaccine mandates and distancing standards in their reopening scenarios. However, despite pent-up demand to get back to normal, there is yet another obstacle threatening to disrupt the recovery–higher prices on just about everything.

Despite the good news of lower infection rates, the pandemic continues to cause chaos beyond the health sector. Interrupted supply chains and materials shortages remain common. These impediments on commerce impact availability of big-ticket items like cars and refrigerators to essential staples like the gas and groceries to fill them.

The service industries are hit too as consumer discretionary spending falls. Despite the savings many accumulated during the lockdowns, consumers already are noticing essentials costing more–and making purchasing decisions accordingly.

The consumer almost always ends up paying more when prices rise for raw materials, labor and other operational fees. For example, Coke, Proctor & Gamble and Kimberly Clark already announced that higher costs for them have forced price increases for consumers. These and other preemptive announcements can offer fair warning.

How business leaders communicate decisions on price increases could make the difference in the success or failure of an enterprise attempting to reopen or get back to normal–especially smaller businesses and those in the service industry.

Some communication fundamentals can help make these difficult conversations with customers and clients a bit more palatable:

1. Emphasize investment and value instead of costs and fees. Words matter. At the moment, consumers are accepting of higher costs for goods and services. How could they not? In addition to the pandemic's health devastation, the consumer was forced to contend with $57 toilet paper and $28 marinara sauce.

However, when something is described in terms of its benefit, instead of its cost, it can sound more attractive. The price of a product or service rarely is the only consideration (see 2 below).

2. Understand the client/customer and show appreciation and gratitude. A business is much more than a sterile series of transactions. For consumers, the decision to retain a service, patronize an establishment or make a purchase often involves emotion. Decisions are made based on how someone feels more than how they think—connect on an emotional level and price is much less concerning.

So, reassure consumers. Be attentive to their needs, show kindness and say thank you, sincerely. All this goes a long way—especially if you are asking consumers to pay more for products and services.

3. Be transparent. Most everyone can see prices are rising. In a new survey, 77 percent of Americans knew of acceleration in the inflation rate; 54 percent were very concerned about it. Hiding the news or tying to bury it rarely works.

Instead, communicate in the sunlight. Be empathetic while sharing the necessity for price changes—and the timeline. If increases are a surprise, they can feel like a betrayal.

While talking about money is rarely easy, crafting a communication strategy that explains price increases to clients, customers and consumers is essential.

Business leaders and communicators must incorporate relevant messages beyond the safety protocols in these changing times. Even unpopular news, when communicated clearly and with purpose, can help build a more loyal customer base and mutually beneficial long-term relationships.

Dan Rene is a managing director with kglobal