This year my company went through the ‘pains’ of a price increase. We don’t do it nearly as often as “the experts” say to do it but honestly, more than I’d like to. I hate raising prices or let me rephrase that– I hate the process of raising prices. Somehow I feel like a filthy corporate raider just interested in profits as I send the extra $2.00 I’ve pilfered from you off to my secret account in the Cayman Islands….Well, that’s how some people would have me feel anyway as they lay on the guilt when they get the news. However once it’s all put to bed, the grumbling has stopped and all the fall out is over, it does seem worth while and life at the ol Bug Doctor office gets quiet again–just the way I like it.
But I wonder…..Did this increase in my fees actually benefit me? I mean, am I actually putting more money in my pocket or am I just treading water? Now that I think about it, have our prices even ever gone up by any real amount or have we just repackaged our service fees and frequencies and our charges are just about the same as they were 20 years ago????
I’ll give you my thoughts, random I’ll admit, but I’d love to hear yours and how you handle (or don’t) this essential part of any business…… Raising Prices.
Are Our Expenses Just Like Ant Lions?
You ever see an ant lion at work? They live just below the sand trap they’ve created and wait for a hapless ant to wander by. Once the ant walks in the concave shaped trap he struggles a bit trying to climb out to the other side–that’s when the invisible ant lion goes to work flinging sand at it with it’s tail preventing the ant from making it out. The ant scrambles to reach the top but the loose footing and the persistence of the ant lion finally causes him (her) to succumb. Sadly, few ants make it out.
I don’t know about you but my prices for pest control products have SKY ROCKETED in the last year and I sometimes feel just like that ant. I used to say to my clients that gas was the number one reason for an increase but I believe my monthly chemical bill has now taken that over. Add to that the ever increasing cost of paper, ink, phone, insurance, advertising,vehicle maintenance, computer costs, TAXES, employees, (did you know they get grumpy when they don’t get a raise?) etc.etc.etc. AND don’t forget the aforementioned GAS!!!!!
Egads,,and all I usually ask for is a $2 dollar increase?…. might be time to rethink that.
Do Customers Really Care?
It’s amazing to me the response we get when we raise our prices. Everything from “about time, still not enough” to “you’re killing me & I can’t feed my puppy because of you.” I guess it’s my fault, I only raise my prices every 3 to 5 years so my people aren’t used to it. Some companies do it annually but personally, I don’t see how that works at all… I know I’d be shopping for a new service if……whoa whoa whoa… would I really? I don’t cancel when my garbage pick up goes up, my cable, my phone and all the items listed above do I? Nope all I do is grumble… so what makes me different then my customer?
In reality, I think people are just used to increases in prices and while some bark and yes some do leave, the majority just see it as a natural part of having services in their lives. Things just go up! The biggest gripe I get is how I’ve presented it to them but that is in my opinion a no win situation. We’ve sent out letters ahead of time= griping, grumbling, some cancelations. Let them know when we scheduled them by phone= griping, grumbling, some cancellations and this round we decided not to say a word and we actually got less griping, less grumbling and fewer cancelations. (which is never many anyway) So for this cycle that worked well but who knows if in 5 years it will again?
Is It Just An Illusion?
When I started in 1984 monthly pest control was the norm and prices were around 22 to 25 dollars. Initial services were 75 to 95 so the years total at the higher end was about $370 dollars. Fast forward to 2013 and (at least around here) services range from 45 to 70 ish per visit. That sure sounds like prices have soared with the magic of time–but have they? It seems that a lot of companies have opted out of the initial charge choosing rather a flat price across the board. Also, instead of monthly visits almost everybody has moved to bi monthly or the ever popular quarterly visits. $70 ish is the price point I see most for qtly visits so assuming there’s no excess initial that’s only $280 for the year. What???? Have we actually come down in price? Even bi-monthly at $45 is only $270. Have we really done ourselves any favors here?
Now I realize these numbers don’t fit every scenario all over the country, heck I’m sure not even in my own state. There’ll always be the high rollers and the low ballers, that will never change. Plus there are less visits (if you don’t get complaints)- Also, I wasn’t around but not long before I started I heard of the $4 dollar regular services with the $8 to $12 initials. (fogging was $3 bucks extra) so I understand I’m seeing history based on my own little sphere…. but am I that far off? I hope so but I think not.
In the end I know that every business needs to periodically raise prices to stay alive but it sure isn’t a pleasant part of owning a company.- I wish I could space mine out further or just not do it at all. You know, thinking about it, I may just do a big ad campaign and tell people I’m rolling back my service fees to 1984 levels. I think people might really like the sound of that, I mean who wouldn’t want to go back to the $22 dollar days?… Looking at the numbers, I wouldn’t need to raise my prices for at least another 20 years. Wonder if I still have my old bell bottom jeans?????