A new website has been launched by The Field Law Firm highlighting it’s appellate law services.

Dr. Dennis Eisenberg, OBGYN and Robotic Surgeon in Plano, TX, launched his new website today. Dr. Eisenberg is trained and certified in the Da Vinci robotical surgery equipment providing robotic surgery services in Plano, TX, Frisco, TX, McKinney, TX, and other surrounding areas in North Dallas.

-Derick Schaefer

Let’s face it, costs are going up all around us. Whether it be the price of our corn based ingredients or goods that require shipping which are in turn dependent on rising fuel costs, overall COGS are going up. As a small business owner, the question is not whether you need to do something about it. The real issue at hand is your overall strategy and how you position it.

This topic has been on my mind for sometime. It takes the right situation for me to really get fired up and sit down and right this. What was the catalyst? I was at my barber shop this week and their prices went up for the first time in over a decade. They’ve been in business over 40 years and when I use the word “barber shop” I truly mean it. This place is old school. So when they have to raise their prices, I knew this this was reality.

The barber shop decided to simply position it as “costs are going up and we had to raise our prices”. They had good points to surround the message. For example, when they opened the shop, a bottle of mens shampoo was under a couple of dollars. The good stuff is $52 a bottle now. One of the barbers said he had a hard rule of not paying more than $35 for a pair of sheers early on in his career. The good ones now are $480. Air Conditioning, rent, taxes, etc. . .it’s all rising.

In the end, the barber shop can pass on these costs and still be competitive. My business on the other had is constantly being challenged by customers to “sharpen the pencil on that quote”. So, in this post I thought I’d simply cover a few options and positioning business owners should consider:

Cost Are Rising and So Are My Prices

This is the barber shop’s approach. I think it is the least desirable as it sends a negative message to customers. Still, even the most savvy of marketing professionals use it. Starbucks makes a huge press event out of it! My only advice here is get your points in order to completely communicate the need to your customers and consider raising the prices of some services and not an accoss the board price hike.

Get Lean Before You Start Passing On

Every business has some inefficiency in it. Whether it be power consumption, leases, hosting costs, over night mail usage, travel expenses, or simple waist associated with last minute decisions (travel change charges, etc), you should use an economy like the one we have to get the excess out of your model and create as much of a profit margin as possible before raising prices. Then if you do have to raise prices in the end, you can communicate the fact that you worked all of these costs out of the business and still have to.

Cash Price vs. Credit Card Price

We all know that we have to pay a percentage to the credit card companies. If you raise your credit card price but leave a cash price that is untouched, you give your consumer the option. Ones who are price sensitive with have an option. You can also position this as a cash discount.

Make More Money in More Creative Ways

I am a firm believer that before you take the “easy out” of just raising prices you need to consider how to get more money out of your customer base. This could be anything from a marketing push to sell an under consumed but high profit good or service to bundling in order to get customers to buy more. I’d challenge my barber shop to sell more shampoo or bundle a shoe shine in with every hair cut at a raised price since the shoe shine guy is a sunk cost anyway and the customer would see perceived value in the price hike. This is the single best approach to dealing with rising costs. . . be serious about making more money! Upsell, cross sell, just plain sell.

We are all faced with rising costs but in the end your pricing has to rhyme with customer needs and ability to digest price hikes. If not, in the end, your plan will look fine on paper but you’ll loose money in the long haul!

-Derick