Raising Prices Is Stressful, But it Doesn’t Have to Be!

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February 11, 2020

As consumers, at one time or another all of us have faced a situation where a vendor has informed us they were raising their prices. How did you respond? No one likes to pay more for a product or service, but the manner in which a vendor communicates their intention to raise prices plays a critical role in how we respond to such news.

The key is to be consistent and transparent when increasing the price of your pest control service. The average consumer understands that price increases are inevitable since they are generally linked to the rate of inflation. Otherwise, we would be paying the same price for a dozen eggs or a movie ticket today as we did a decade ago. How you decide to tell the story of that price increase, however, will determine if your customers stay with you in the long-term or bolt to a competitor at the hint of a price increase.

As Ralph Zuponcic, president of PricePoint Partners counsels in this month’s PCT cover story, “Even if you don’t see tremendous increases in product costs in a particular year, your cost of doing business does increase every year, attributable to any number of rising costs — fuel, equipment purchases or leases, employee health insurance, etc. If you ignore this upward creep, you will at some point be squeezing your margins so tight that you are not making money or, worse, losing money. Keeping pace means adjusting your prices, even slightly, every year or two, consistently.”

Ultimately, the success or failure of your pricing strategy will be determined by the relationship your company has developed with its customers over time. Longtime clients who have had a positive customer experience with your firm for many years or have developed close personal ties with their technician will accept modest price increases more readily than a new customer without a long association with your business and its employees. How do you bridge that gap in customer experiences? You can start by making sure all of your customers are told the same overarching “story” of your business, a story that connects them to your company not in a transactional way, but an emotional way.

Ty Mantague, author of “True Story: How to Combine Story and Action to Transform Your Business,” addressed this very topic in an article in the Harvard Business Review several years ago, writing, “Back in the summer of 2006, New York Times Magazine columnist Rob Walker was mulling the question of what makes one object more valuable than another. What makes one pair of shoes more valuable than another pair if they both deliver on the functional basics of comfort, durability and protection? Why does one piece of art cost $8 million and another, $100? What makes one toaster worth $20 and another worth nearly $400 if they both make toast? As Walker turned these questions over in his mind he concluded that it is not the objects themselves, but the context, the provenance of the objects, that generates value. In other words, the value isn’t contained in the objects themselves, but in the story or the meaning that the objects represent to the owner.”

Now, businesses aren’t objects, but every business does have a story. What’s yours?

 

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This month, a quarterly technical column makes its debut in the pages of PCT. “From the Field,” which will be written by a rotating crew of Terminix pest management experts, kicks off with a column by Douglas Webb about termite swarms (see page 94). Webb, technical services manager at Terminix, has been with the firm for 37 years. This column nicely rounds out the space occupied by our other quarterly columns: Pest Perspectives by Rollins’ Chelle Hartzer and Glen Ramsey; and PPMA Pulse by Cindy Mannes.

The February issue also features stories about two important milestones in the pest control industry — the 20th anniversary of Termidor (see page 72) and the 25th anniversary of Sentricon (see page 68), two popular products that ushered in a new era of termite control protection. And the latest installment of PCT’s Executive Forum Interview series features a profile of Zack Zaki, business director, FMC Global Specialty Solutions, who has an interesting personal history and offers some valuable insights about FMC’s plans for the future. Enjoy!

The author is publisher of PCT magazine.