Is Your Company Going to Get Punished for Raising Prices?
Major corporations are engaging in a greedfest that is feeding
inflation. Smaller merchants can join them, but they face the risk of
alienating local, loyal customers like me.
BY HOWARD
TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH
INVESTORS@TULLMAN
The prices of Halloween goodies were surely no treat this year.
More like a nasty trick, with price hikes scary enough to take your breath
away. It appears that the big retailers have abandoned the notion of using
large orange packages filled with tiny simulacrums of all the old staples as
loss leaders. Instead, they chose to take profits, and continue to rip off
their customers at every opportunity while solemnly blaming it on Covid-19
problems.
The price of chocolate candy is off the charts and if you
thought Elon and his Musketeers were a threat to your pocketbook, try buying a
box of 3 Musketeers bars without a bank loan. Shopping these
days is no picnic; in fact, it feels like a grudge effort (not unlike cable
television) where there's no joy left in the process. There's just the
sad and painful realization that you have no choice in the matter and the
steady pain at the register. Most retail providers, especially those who are
face-to-face with the consumer, aren't doing anything to help the situation.
Strapped consumers watch the cashier scanning things up--or have to scan their items
themselves-- and it sounds mainly like a slot machine in reverse.
They aren't thinking about giant evil corporations like Mars or PepsiCo -
they're looking at their receipts and blaming their local
merchants at the point of sale. And, to be clear, they're not wrong because the
shoe clearly fits. Restaurant patrons aren't feeling any better - the bottom
keeps rising and the top is out of sight. Breakfast or lunch at the diner or
nearby greasy spoon costs more than dinner used to and the heartburn is even
worse when it's combined with the pinch in your wallet.
I recently ate at a neighborhood joint I've frequented for
decades and, while the price of the meal for two was what I used to pay for a
family of four, the real shock was the extra two bucks tacked on to the bill
(without prior disclosure) because I used a credit card. Honestly, I thought
that this practice had been outlawed, but I guess I was wrong. In any case, in a
busy restaurant this late in the pandemic game, when the joint seemed to be
back on its feet and doing fine, the fee just felt like a sneaky and sleazy way
to tack on a couple of extra bucks of profit at my expense. We won't return any
time soon.
I encountered a different version of this flimflam at another
restaurant- part of a much larger food group - where the detailed receipt,
which most humans no longer bother to read, added a few bucks as a COVID-19
charge, again with no disclosure or notice. But here, because I guess I wasn't
the first "guest" to be offended by the surcharge, my server told me
that the company policy was to remove the charge whenever anyone squawked, as I
did. The corporate policy: see if you can sneak it by the suckers but cave the
minute any customer questions you. You start to wonder what corners they cut
and other tricks they play in the kitchen if they can't be trusted to tell you
the truth about pricing your meal. There's an honest and right way to adjust your prices, if
necessary, but this isn't it.
And really, that's the point. It's not the money you might be
making or stealing from your customers, it's the damage that these sneaky
little add-ons are doing to your reputation, customer loyalty, and their basic trust and confidence in your
operation. It's stupid, shortsighted, and clearly a losing proposition, but millions
of merchants are still sticking it to their patrons mainly out of greed and
maybe a little laziness. Before your business hits rock bottom, you need
to pay attention to the most important bottom line: if you care about your
brand and your long-term connections to your customers and consumers, now's the
time to stop putting short term profits ahead of them.
Remember that these same folks were the ones - early in the
pandemic - who supported your business and stuck around when times were really
tough. They came back as soon as they could because they believed in you and
thought it was important to pitch in and help you and your team survive.
Loyalty like that is priceless and is an important part of your brand and
reputation. It's not worth sacrificing for a few incremental bucks.
Most things in the world can be bought or sold, but not a
reputation.