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How To Avoid a Price Hike Mutiny
Determining a fair price for a product or service can be tricky at times. Indeed, we see just as many companies get it wrong as get it right. Netflix is one such example, for even though the service remains popular today, their price change fiasco last year tarnished a once unblemished reputation. But why were people so upset? Netflix is hardly the first company to raise prices on a product.
Actually, the issue was not so much the price change, but the fact that the price was increasing without the end user seeing any additional value. Customers didn't need a tracking tool to see this. You spend more money, you get less for it, and the value of your resources goes down. Add in the fact that Netflix altered pricing and even tried to introduce a new service in a relatively convoluted way, and it is clear why customers felt at best confused, and at worst betrayed.
To avoid a situation like this, it is always important to realize that competing on price is not so much of an issue if you compete on value first and foremost. Of course no business should operate at a loss. There is no argument for that, and rarely do businesses wish to anger customers by arbitrarily raising prices. So, before that decision is made, it is important to determine what the customer will get out of a price increase.
By tracking and managing resources, it is possible to determine the precise value of any additions to software, physical products, and mobile applications. Insight into how much time, manpower, and money goes into it will allow businesses to make a fair decision that makes sense for them financially while still presenting the customer with a valid reason for spending more money on a product, without simply resorting to some vague appeal to economic woes.
Be fair to customers, and be open as well. If you have to increase prices, make sure that they understand why, and also make sure they know that it is good for them, as well. Sure, you may still lose some of them, but for those that stay, you will have retained an important recurring resource: loyalty.