Is The Price Right?
With the right execution, a price increase doesn't have to cost you your customers.
As you watch your expenses steadily climb to new highs, it becomes harder to deny the inevitable: You need to raise your own prices. But your anxiety has kept you from pulling the trigger on the pricing gun. Will your best customers balk at the change and walk across the street to your competitor?
Sarah Lurie, founder of Iron Core, a kettlebell fitness center in San Diego, faced that uncomfortable question in January as she watched her own costs rise. But she decided to look at it as an opportunity to hold her core customers. "I knew we would lose some people," says the 37-year-old former Wall Street trader. "But my logic was that it's better to have a smaller group of people who are willing to pay more and stay with you longer." Having checked the competition's prices, Lurie felt confident that a 30 percent increase was reasonable. Indeed, most customers were willing to pay the new $129-per-month membership fee, and only a handful chose not to renew.