Not Too Much or Too Little: Using the Goldilocks Approach for Price Increase Messages

The concept of not shooting the messenger who bears bad news has ancient roots, though it’s always up for interpretation. For example, note Vladimir Putin’s advisers, who, just weeks ago, were afraid of relaying bad news to Russia’s leader, per U.S. intelligence. Also not long ago, local government officials in Wuhan, China, allegedly understood the professional and personal risk of sending reports to Beijing about a sickness they’d observed. Their reluctance, in Oct.-Nov. 2019, allegedly gave Covid-19 a head-start of weeks on what became a global killing spree.

Plutarch (circa 46-119), in his book “Lives,” writes of Tigranes II (95-55 BC), king of Armenia, beheading a messenger for informing him about an advancing enemy force. Similarly, Shakespeare mentions characters wanting to kill messengers carrying bad news, though they don’t go through with it.

Some communicators can relate. They’re crafting messages about price hikes as the global economy experiences inflation. As such, prices are rising and the value of currency is falling. You need $108.50 today to buy a basket of items that cost $100 last year. In the U.S., inflation reached 8.5 percent in March, its highest level in 40 years.

At the moment, strong demand and supply chain issues are fueling inflation. The war in Ukraine also has a hand in inflation. However, not every service or product is more expensive now than it was previously. Sometimes, popular products can withstand rising prices.

Unfortunately, many products needed for daily living, such as food staples, housing and energy (gasoline and electricity), are major inflation culprits in 2022. As such, Moody’s Analytics estimates the average U.S. household is spending $276 more per month than previously. Moreover, rising food prices are hitting the poor disproportionately.

Relaying messages about higher prices is the communicator’s job. As such, we asked communicators in affected fields for best practices. In addition, thinking that experience is a great teacher, we spoke with communicators in industries, including PR, where rate hikes are annual or, worse, multi-annual occurrences.

In sum, we found similarities in messaging on prices, regardless of whether the sector increases fees regularly or does so occasionally. For instance, empathy and transparency were mentioned often. Communicating value was another element mentioned a lot. Last, all agreed such messaging requires the finesse of Goldilocks, not too much or too little. Just right.

For instance, “you don’t want to trumpet higher prices, but you also don’t want customers to be surprised” when they come, says a communicator who works in a sector with regular rate hikes. Even though his company’s customers are on a regular price increase, he sends reminders of the coming hike.

Similarly, it’s best to avoid detailed explanations of price rises, that tends to come off as shifty, says Inspire PR’s founder Hinda Mitchell. On the other hand, PR pros need to offer a bit of explanation in their messages, Mitchell and other communicators agree.


‘Best of Times and…’

Ironically, this moment is a decent time for communicators building messages about higher prices and related unpleasantries, such as supply chain delays. “There is sort of a universal awareness [of inflation and supply chain problems],” Mitchell believes.

As unpleasant as they are, rising prices and supply chain issues are things consumers are experiencing in multiple areas of their lives. “If it’s not hitting you in one place, you’re probably getting hit at the grocery store or at the gas pump,” says Mitchell, who works often in the food and restaurant sectors. “There’s safety in numbers in that your industry isn’t the only with higher prices,” she adds.

Similarly, “the rising tide has lifted [prices in] all boats,” says Parry Headrick, founder, Crackle PR. So, it’s “much easier” communicating about price increases now, he says.

Turning to supply chain woes, Headrick says inevitably consumers have tried to make a purchase and discovered what they wanted was out of stock at a store and/or online. Indeed, Headrick recently received a shipment of two chairs he bought more than one year ago.

Accordingly, this unusual moment calls for tailored messages, the communicators we interviewed believe. Explain less about why there are price hikes and missing products now and lean into “we understand,” Mitchell says.


Acknowledge and Take It Seriously

In addition, communicators should avoid minimizing or dismissing price increases or other issues. Don’t say inflation is what it is as an explanation. Similarly, avoid the incomplete message Headrick’s furniture dealer offered during multiple contacts: There’s nothing we can do about thisour hands are tied.


‘Diplomatic Empathy’

Instead, Mitchell says, “you have to paint [at least a small] picture” for the consumer about why prices are rising. Moreover, deliver the explanation with what Headrick calls “diplomatic empathy.”

For him that means “saying things that show you feel” what the customer “is going through…you recognize your customers as people who are having trouble and pain.”

When you’re empathetic about news that isn’t very good, customers “tend to cut you some slack, and here they understand [inflation] isn’t great for anyone…I’m delivering the same message, but I’m doing it as a human to another human, not as a bottom line to a target.”

False Confidence

In addition, avoid trying to inspire false confidence. “For some people, [price] increases feel overwhelming,” Mitchell says. For example, never say, it’s just a 5 percent increase or, don’t worry, it’s not so bad. Communicating like that is a good way to lose trust, Mitchell says.

After acknowledging pain in the message, the next ingredient, Mitchell and Headrick agree, is transparency. In this moment, transparency takes multiple paths.

For instance, in the food sector, Mitchell says communicators are including elements customers are familiar with, such as higher costs for inputs, including feed grains, labor and shipping/transportation.


Commodities: Price Takers, Not Price Makers

“These are things customers are dealing with in other areas of their lives,” she says. So, messages like food prices are up because everything we’re doing to produce your food is going up are appropriate.

On the other hand, certain prices, such as for food, can require slightly more explanation. For instance, most consumers are “four generations removed” from farming, Mitchell says. So, when communicating rising food prices, PR pros may include a brief primer about commodities’ influence.

For example, commodities like grains, corn and soy beans are staples of feed for animals, such as cattle. As a result, producers pass those higher commodity costs onto consumers in the form of increased prices for meat and pet food.

But avoid too much detail about commodities and their influence on supermarket or restaurant prices, Mitchell says. “Less is more here…an overly detailed explanation can make you sound shifty.” Adding a for example or an anecdote is a useful tactic, she says.


Manage Expectations

“We’re in an under-promise and overdeliver” period, Mitchell says. And it’s a delicate dance. Make sure your communication contains messages of hope; we’re working hard to minimize disruption, but not, we’re making it go away. “There’s too much we can’t control…there’s nothing telling us that inflation will be over soon,” she says. Indeed, one of the fears is that inflation could prompt a recession.

For some communicators, managing expectations extends to announcing price increases. Also, it’s a matter of transparency, Mitchell says. “Look, people know about inflation, but what they hate are surprises…so, again, avoid being shifty about it…consumers will notice…it’s not if, but when.” As such, communicate higher prices as early as you can.


Crisis Communication Approach

When considering price increase messages, Headrick says adopting a crisis communication stance is helpful. “Communicate promptly and as openly and honestly as you can,” he says. Similarly, Mitchells says, “the more advance notice you can give customers the better chance you have of building trust.”

So, for restaurants, this means communicating price hikes with signage at host stands, on doors or in menus, mailers or emails. There’s no need to “smack [customers] in the face” with a price-rise message, Mitchell says, but “we want to make sure” the information is available. Headrick adds, sometimes it’s appropriate to announce price increases in a press release to key stakeholders. “This builds trust, even if it’s news they didn’t necessarily want to hear,” he says.

And always include “a strong message of appreciation,” she adds. For example, we’re grateful for your business and we’re doing our best to keep menu items affordable…owing to supply chain issues, we’ve had to do…


Reinforce Value through Data

Another best practice is including data-driven comparisons. In Mitchell’s case, a piece of go-to is data showing how much more affordable food is in the U.S. than elsewhere.

Similarly, when people are paying a bit more for a good or service, part of the message can mention the value the product brings. For example, Mitchell mentions meat and eggs remains relatively affordable protein sources. “But this is after you’ve acknowledged” the hurt of price increases.


Regular Price Rises

Some sectors, PR agencies among them, raise prices and fees regularly, irrespective of inflation, supply chain issues and the war in Ukraine. PR firms tend to have a yearly fee increase baked into multi-year contracts, Headrick says.

Beyond yearly increases, one way to view price increases, Headrick says, is tantamount to employee performance reviews. A proper approach includes periodic communication with employees. “You never want an employee to be surprised about [the content of] a review,” he says. Similarly, a good PR firm will have regular communication with those it represents. As such, it should not be a surprise when the PR firm bills a client for additional work during a particular month when the scope of work “went above and beyond” the normal monthly fee, Headrick says.

In addition to PR, there are other sectors where customers expect a yearly rate hike. We spoke with communicators in some of those sectors. We agreed not to release their names or identify their companies and sectors.

All of the PR pros in these sectors were quick to note they’re not getting a pass during inflation. And there’s more concern than normal about messaging. That’s because the usual yearly bump likely is higher now, with inflation. Moreover, there may be multiple rate increases during the year, instead of just one.

Still, one communicator says, “you communicate [the increase] the same way” you would in other, non-inflation years. That means “knowing your audience” and where best to send messages. Similarly, one communicator recommends all industries send alert to consumers in advance of rate hikes. Here we are, adjusting your rate to put us in line with the rest of the industry.

However, “you have to understand and acknowledge [this year’s increase(s)] is larger and hurts your customer more” than during a normal cycle.

In addition, “you have to equip frontline personnel” to handle complaints.

So, in the restaurant example, “the hostess and waiters need training. They’re going to hear complaints from customers about prices. It’s important that all staff deliver the same message, and do it with empathy.”

This communicator also mentions some businesses need to take a long-term view. Sometimes a customer doesn’t interact with your business for months, he notes. Still, employees should be prepared to deliver “the message,” even months after it was crafted.

Another similarity PR pros in his industry share with communicators in other sectors is that even with the most carefully crafted message, “to some extent, consumers just don’t really care” about inflation causally. “They’re upset that the price of milk is higher. They don’t care if you explain to them that it costs dairy farmers more to buy hay for their cows.”

Still, this communicator focuses on education. He sees every bill as “an opportunity to educate” consumers. As such, his company routinely includes supplementary explanatory materials with bills. “You can’t just say, prices are going up; it’s inflation. People want to know a bit more than that.”

Similarly, another communicator praises the “educational approach” his company has taken for years, with an assist from media. “I feel we’re in a good place now, education-wise, helping people understand the economics” of our business model.

Indeed, this communicator says his company’s consumers are accustomed to the yearly rate rise. “They expect it, and know when it’s coming,” he says. Similar to sectors where increases are not regular, the company he represents passes on higher input costs to consumers. As such, he expects this year’s rate hike will be greater than normal.

Another element makes this year more difficult, this communicator says. “With a rate increase message, you always want to include” content about increased value. “This year, that’s going to be harder” as input prices have limited his and other companies to maintaining existing services.

On the other hand, “as a business, hopefully you’ve been constantly improving things all along. [Communicators] should point to those” things in their rate hike messages, he adds.