Everything you want to know about raising prices
A manager's guide
With unprecedented volatility in input costs, energy prices, and increasing inflationary pressures, the urgency to manage pricing margins has never been greater.
The mere idea of raising prices in an environment with spooked consumers, uneasy stock markets, and competitors waiting to pounce on mistakes has kept many pricing managers from getting a good night’s rest.
Yet the ability to raise prices is a critical element to surviving—and even thriving—in this economy. Rarely before has there been more pressure to find incremental margin gains, given stagnant growth, and, increasingly, inflationary pressures affecting input costs. Discussions with some managers, however, reveal that their single most feared tactic in today’s economic environment is the price increase.1 While there is a need and a desire to increase margins, fear of potential consequences too often prevents managers from making decisions.
Management fears regarding price increases are not unfounded. There are many prominent examples of price increases gone wrong.
In this practice perspective, Georg Muller, a leader in Monitor Deloitte’s pricing and profitability management practice, breaks down how to manage cost changes effectively, responsibly and profitably, without losing your customer.
1 Conversations with Monitor Deloitte clients in the apparel, healthcare, and flexible packaging industries.