Situation: Client was very concerned that raising prices would alienate customers and reduce overall sales. Prices had not been raised in five years.
Solution: Grow MFG developed and executed a strategy to increase prices annually with a minimal risk to the existing business. This began with market research to understand overall customer price sensitivity, competitor price levels, and amount of price increases by client's customers. Research indicated:
· some products were being sold for a price lower than competition
· some products were relatively unique and customers were less price sensitive to them
· client's customers had been raising prices over last five years
Grow MFG provided resources to execute price increases across the board with the largest increases where competitors were more expensive and where customers were less price sensitive. Created simulations to calculate impact of price increase. Developed retail price list and worked with IT to upload pricing to system. Prior to launching price increase, worked with sales to develop price increase communication tools to overcome potential customer objections. Since this strategy involved moving to an annual price increase, created systems and infrastructure to more easily increase prices the following year. Grow MFG worked with client to raise prices in year one and again in year two.
Results: “Grow MFG worked with sales, customers, IT, and finance to raise prices in a nearly risk-free fashion. Prior to Grow MFG’s involvement, there were serious concerns about raising prices. The data driven approach that was taken helped address those concerns. In addition, they created the bandwidth and know-how to safely raise prices each year for the last three years. I would highly recommend working with Grow MFG to support any price increase.” Paul Bauman, VP and General Manager Champion Funeral