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Earning the Right to Raise Prices


There are two kinds of companies — those that work to raise prices and those that work to lower them.” — Jeff Bezos

Jeff Bezos is right, there are two kinds of companies: those that find ways to raise prices and those that work to lower prices. Both ways can fuel success but many times businesses look at raising prices as a last resort to drive sales. However, it’s probably smarter to follow the path of raising prices to find long-lasting year-over-year sales growth.

As marketers we know there are three and ONLY three strategies to drive sales: (1) Get New Customers to Buy, (2) Get Current Customers to Buy More, More Often, and (3) Raise Prices.

Getting new customers to buy is all about strategies involving newness. We’re talking about introducing new products, entering new markets, launching new advertising campaigns, etc. to gain new customers.

Getting current customers to buy more, more often involves ways to capitalize on the visitation and shopping habits of the customers you already have. Businesses can do this through add-on sales, upsell tactics, prompting visits at a different daypart, etc.

Raising prices is just that, raising the prices on the goods/services you sell.

When was the last time you raised your prices?

If it’s been more than two years, you’re falling behind. Payroll taxes have certainly increased in that time. Most likely the benefits you offer employees have also increased. Not to mention cost of goods sold is sure to have gone up. But your prices haven’t. That means your profit margins are shrinking. (Ouch.)

If it’s been more than five years since you raised your prices then good luck having your customers adjust to higher prices when they’ve become trained to accept a lower price.

Let me be clear, it’s not easy to raise your prices. It’s hard work. Not every company can do it. You have to first earn the right to raise your prices before you can do it.

Earning such a right means you must do some (or all) of the following:

  • Sell a unique product/service
  • Deliver excellent customer service
  • Maintain a market leadership position
  • Stand for a higher purpose (i.e. green business practices)

On Monday, Netflix announced its first price increase in three years. New subscribers will be paying up to $2 more per month to stream movies and television shows. (According to Netflix, existing subscribers will continue to pay their current rate for a “generous time period.”)

Netflix has earned the right to raise their prices because the company sells a unique product (original programming like House of Cards and Orange is the New Black) and has exclusive rights to lots of movies and television shows. Netflix also commands a significant leadership position over other video streaming companies.

Chipotle recently said a price increase will go into effect later this year due to increasing food costs. Expect your Chipotle burrito to cost up to 10-cents more come fall. The last time Chipotle raised prices was three years ago… so yes, Chipotle was overdue for a price increase.

However, Chipotle has earned the right to raise their prices because they sell a unique product, maintain a market leadership position, and stand for using organic and natural ingredients.

Amazon has announced a price increase with its Amazon Prime service. Shocking, right? Amazon has built its business model following the strategy of working to lower prices, not raising prices, to drive sales. The next time a customer renews their Amazon Prime membership, they will be paying $99, up from the long-standing $79 yearly fee.

In many ways, Amazon has earned the right to raise its yearly Prime membership fee. It’s a highly unique service that began by giving customer free two-day shipping and now gives customers to ability to stream movies and television shows for free and to borrow Kindle books at no cost.

Starbucks is currently wrestling with raising prices to offset behind-the-scenes expenses associated with rising wholesale milk and green coffee prices. It’s been a few years since Starbucks last raised prices but Starbucks has routinely raised its prices even when not pressured but outside forces. Like Chipotle and Amazon, Starbucks has earned the right to raise prices through serving unique products, delivering great customer service and standing for a higher purpose.

How about your business?

What are you doing to earn the right to raise your prices? And, how would your customer react to a price increase?

My advice is to first earn the right to raise your prices and second, routinely your prices before you are pressured to do so because of shrinking profit margins.

Every year or two, increase your prices by 3% to 4%. If you sell a unique product/service, deliver excellent customer service, maintain a market leadership position, and/or stand for a higher purpose your customers will hardly blink an eye when you charge them a little more.

If you wait five years before raising prices and you hit your customers with an unexpected 18% to 20% price increase, then expect a backlash resulting in fewer customers and lower revenue.

Expect a far greater backlash if you attempt to raise your prices without first earning the right to do so. Pricing power is a privilege that has to be earned, dig?

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If so, sign-up to receive the monthly Brand Autopsy newsletter and you would’ve already read this. As a bonus for anyone signing up for the newsletter, you’ll receive a two-page tip sheet for encouraging customer advocacy.


Ekaterina Walter has social media chops. She spent years as a social media strategist with Intel and as a Word of Mouth Marketing Association board member. Currently Ekaterina is the CMO at Branderati, an agency that spends a lot of its time designing social media influencer programs.

She has strong views on social media but her view on what’s the best social media network is her strongest yet.

In a recent Forbes article, Ekaterina Walter writes:

”Being known as an early adopter and practitioner of social media strategies and tactics usually means you constantly get asked this question: ‘What is your favorite social network?’

My answer never wavers: ‘A table and two chairs.’

Which is sometimes followed by: ‘A’ No. A physical table with real chairs – a space where you can actually connect with human beings face-to-face – the only way to truly get to know each other and establish a meaningful connection.”


A few years ago I was on a panel at a conference where a social media expert asked us how businesses can get closer to customers. Everyone on the panel said something about leveraging Facebook and Twitter to engage with customers on a deeper, more meaningful level.

As I fought back the vomit ascending up my throat I interjected, “How about picking up the phone? How about actually talking with customers voice-to-voice and better yet, face-to-face?”

That’s why I love Ekaterina’s point of view when she says:

“We need to stop hoping that technologies will perform miracles for us! If you want to build your network, if you want to find people you have common passions with, if you want to grow your business – you HAVE to get out there and meet people! No more excuses! No more hopes that Twitter or Facebook or LinkedIn will do it for you!

So step away from the keyboard! Set up lunch with people you want to know better. Go see your current or prospective clients face-to-face on a regular basis.”

It’s worth spending a few minutes today reading Ekaterina’s perspective on what why the best social media network is A Table and Two Chairs.

Manifest Customer Destiny

Late last year I stumbled upon a thought-provoking ebook from Michael Schrage that has upended how I look at business innovation.

Michael Schrage is a research fellow at the MIT Sloan School Center for Digital Business. His ebook attempts to redefine how companies should approach innovation by focusing on this question: Who do you want your customers to become?

He refers to this question as THE ASK and in the ebook, Who Do you Want your Customers to Become?, he makes the case for why this question is important to focus on because it “offers a lightweight but high-impact methodology for aligning strategic, marketing, brand, and innovation leadership around customer transformation.”

Look at any successful innovation from the Amana Microwave Oven to the Ford Model T to Microsoft Windows XP to the Southwest Airlines business model. These innovations didn’t just transform the companies that introduced them; they transformed the lives of customers who use them.

Schrage writes, “Customers don’t just adopt innovations; they alter them, adapt to them, and are changed by them. Like economic Charles Darwins, successful innovators strive to observe and understand how their customers evolve.”

The key idea behind Schrage’s thinking is: “Successful innovators don’t just ask customers and clients to do something different; they ask them to become someone different.”

I recently spoke at a gathering of Community Managers and Social Media Managers and used Schrage’s thinking as the basis for my talk titled, MANIFEST CUSTOMER DESTINY: Helping Your Best Customers Become Better People.

My hope was to get these marketers to go beyond connecting with their customers on social media to helping their customers become better people.

I’ve recreated the talk as a 13-minute narrated video. Consider this a first look into a topic I plan to explore much deeper in 2014. Enjoy…

Did you like this post?

If so, sign-up to receive the monthly Brand Autopsy newsletter and you would’ve already read this. As a bonus for anyone signing up for the newsletter, you’ll receive a two-page tip sheet for encouraging customer advocacy.

You snap. You share. We donate.

Valentine’s Day is less than two weeks away and it’s a time when passion conversations happen.

At Brains on Fire we know something about love and how it applies to business. We’ve written the book on how to get people to fall passionately and madly in love with your business.

Now we’re putting our money where our heart is with a lovely offer that supports Love146, an amazing charity dedicated to ending child sex slavery.

We’ll donate* 14.6% of the retail price for each copy sold of THE PASSION CONVERSATION during the month of February. *Donation capped at $1k.

Wanna play along?

(Cool. That makes us happy.)

Snap a photo of your copy of THE PASSION CONVERSATION (along with your receipt) and share it on Twitter or Instagram using the hashtag #iLove146.

Perhaps you’re old school. If so, email your photo to:

MarySusan at BrainsonFire dot com

Needing a primer on Love146? Watch below. (Tissues recommended.)

Love146 Overview from Love146 on Vimeo.

What Great Brands Do

It’s not easy building a great brand. Many businesses try. Few succeed.

Denise Lee Yohn has been part of the brand-building game for the past 25 years. Her experience began first with insider positions at great brands like Sony and Jack in the Box. Second, as a consultant with Frito-Lay, New Balance, Oakley and other well-known brands. And third, as a lifelong student of the brand-building game.

She’s finally written down the advice she has followed and given on how businesses can achieve rarified air in her first book, WHAT GREAT BRANDS DO.

This one line sums up Denise’s smart “brand as business” advice: “Your brand can’t just be a promise; it must be a promise delivered.

Her book goes deeper by sharing seven principles that brands follow to become great. When businesses follow each of these principles they start to build a great brand because you cannot build a great brand before you build a great business—the process is simultaneous. It’s “brand as business.”

Here’s how Denise explains what “brand as business” means…

Every great brand defines its brand as its business. It puts its brand at the core of its business and goes to great lengths to make sure there is no daylight between managing the brand and managing the business.

In an email exchange with Denise I asked her to cite a brand that follows her “brand as business” approach. She cites Amazon.

DENISE: Amazon’s mission is “to build a place where people can come to find and discover anything they might want to buy online” and Bezos talks about its commitment to three things: the best selection, the lowest prices, and the cheapest and most convenient delivery.

Amazon really lives up to those ideals.

It’s the first place that most people go to look for products, read reviews, and check prices. It has set the standard by which other e-tailers are judged and its footprint continues to grow. At the same time, Amazon is clear about what it offers and doesn’t try to be what it’s not. The shopping experience is streamlined and straightforward, not particularly stylish or fancy. As such, people who are looking for the kind of experience Amazon offers are drawn to the brand and have developed a real sense of trust in it.

One of the more provocative brand-building principles Denise shares is great brands avoid selling products. Obviously, this begs the question if great brand don’t sell products, what do they sell? Denise has something to say about that…

DENISE: Great brands offer emotional connections by meeting emotional needs or through an identity that it helps its customers experience or express. They know that a product is merely a means to an end – a way of fulfilling a desire, doing a job, fixing a problem – and customers care mostly about the end.

Nike isn’t in the business of selling shoes – although it sells plenty of them. It’s in the business of inspiring and helping people feel like athletes. Its long-standing success as a business and a brand is due to the way it connects with people through aspiration and achievement.

Interested in learning more about Denise Lee Yohn’s book WHAT GREAT BRANDS DO? Visit these blogs, they’re part of the Post2Post Book Tour for Denise’s book:

Monday | Jackie Huba
Tuesday | Phil Gerbyshak
Wednesday | Paul Williams
Thursday | John Moore … (hey, that’s me)
Friday | Jay Ehret

Beyond Thinking Different to Doing Different

Originally posted on December 31, 2004

Bruce Mau, a designer, thinker, articulator, and massive change provocateur, has a lot of ideas on a lot of things. His Incomplete Manifesto for Growth is a list, an incomplete one at that, of 43 ideas to get you beyond thinking differently but doing differently.

As 2013 turns to 2014, the message of doing differently is one we should all heed. The first incomplete ideal is featured below. Heed and enjoy.

For all us marketing types, December is an interesting time of the year. It’s a time where we are busy finishing projects for this year while at the same time visioning projects for next year.

Earlier this year I spent time committing to paper various exercises business teams can do to better vision who they are and why they exist.

These exercises were designed to help businesses find THE PASSION CONVERSATION that can spark long-lasting word of mouth from customers and employees about a brand, organization or cause.

If you find yourself in need of better understanding what your business stands for, why it deserves to exist and what exactly appeals most to your customers then these three “Passion Exploration” exercises might help.

You game for playing?

If so, here’s my suggestion. Gather together a small team of no more than 16 people, but no less than eight. Be sure to go outside of your department and include people from other areas of your business. (Bonus points for including people who interact directly with your customers.) Pick one, two or do all three of the following Passion Explorations.

Passion Exploration #1 | WHAT’S OUR CAUSE?

Gather a group of employees together and split them into smaller groups of three-to-four people. Find markers, index cards and large poster paper. Have each small group work together to draw a picture of your brand as a superhero. Make sure they assign their superhero a superpower. Then, ask the following questions to spark a meaningful discussion:

  • What injustice(s) is our hero’s fighting against?
  • Who does she protect?
  • Why do people admire her?
  • Who are the arch villains?
  • What is our hero’s kryptonite? (What can render her powerless?)
  • How might this cause stand-alone from our brand? (How is it about far more than just us?)
  • What are some stories that tell us that this fight is something people care a lot about?
  • How might we invite people (customers) to join our superhero’s fight

  • Passion Exploration #2 | JUST ONE THING

    Again, gather together some employees. For this exercise consider keeping the group small, no more than eight people. Set the scene by having everyone imagine that your business can only do ONE THING for your customers. Yep. ONE THING. Have people write that ONE THING down on a note card and then, one-by-one, have people share what they’ve written down. Next, use the following questions to spark a group discussion:

  • What should our ONE THING be?
  • How could we do it really, really well?
  • What would make us remarkable at that ONE THING?
  • What would make it amazing and fun?
  • What is stopping us from focusing on that ONE THING?
  • How might we overcome those obstacles to better focus on that ONE THING?

  • Passion Exploration #3 | WOULD YOU BE MISSED?

    It’s easy in the midst of our never-ending workload to forget about the value we add to others’ lives. But that’s the very reason we’re in business in the first place. This exercise explores just that, the passions that people have for why we do what we do. Gather a small group together and for 30 minutes answer the following questions:

  • Who would miss us if our business ceased to exist?
  • Would our customers be able to find another business that treats them as well as we do?
  • Would our employees be able to find another employer that respects them as much as your business does?
  • It might be nice to also do this same exercise with your customers, adapting the questions a bit. Listen for and discuss the possible shared hidden passion conversations inside the answers to why customers and employees would miss your business. If you happen to discover that your business wouldn’t be missed, then you’ve got some serious matters to address in what’s left of 2013 to make the most out of what’s possible in 2014.

    Did you like this post?

    If so, sign-up to receive the monthly Brand Autopsy newsletter and you would’ve already read this. As a bonus for anyone signing up for the newsletter, you’ll receive a two-page tip sheet for encouraging customer advocacy.

    The Passion Conversation playing in the Idea Sandbox

    Paul Williams from the Idea Sandbox is a freak. He knows it. I know it. And if you didn’t know it, you’ll certainly know it after listening to the “podcast” he did with me to highlight tidbits from THE PASSION CONVERSATION book.

    Yes, it’s true. I skipped out on doing the podcast with Paul. Instead, I was at the Trappe Door enjoying some tasty Belgian beers. Good thing Paul found a replacement for me. And, the replacement did a great job weaving in references to Preparation H, One Wipe Charlies, and Whole Foods Market. I’m still wondering how Stephen Hawking was able to join the podcast. Paul must have connections.


    Paul also shares the transcript. Here’s a snippet:

    PAUL: Please elaborate on the idea of products having a “soul.” A soul for a product is an interesting idea. Please use the words “consortium” and “palette” somewhere in your answer?

    johnmoore:Hmmm. Okay, let me see what I can do. Products that are much more than merely palatable have a seemingly broad combination, or consortium, of attributes that lends itself to making people feel better about themselves. The other day at Brains on Fire, Geno Church went around our offices sharing with us how much he enjoys using Ursa Major’s face tonic. Clearly, using this product makes Geno feel better and the ladies here would chime in that his skin looks more supple than ever.”

    Jackie Huba and The Passion Conversation

    I’m honored to have Jackie Huba feature THE PASSION CONVERSATION on the Church of the Customer blog today. We’ve known each other for about 10 years, that’s when she published CREATING CUSTOMER EVANGELISTS. Her latest book shares customer loyalty lessons from mega pop star, Lady Gaga.

    Jackie was one of the first people to the read THE PASSION CONVERSATION and was gracious enough to give us this blurb recommendation:

    “Love is the missing ingredient in developing loyalty with customers. In THE PASSION CONVERSATION, the smart folks at Brains on Fire expertly explain how to develop deeper connections with customers who in turn sing your praises to everyone they know.” — Jackie Huba

    On her blog today, Jackie asks me to go a little on some of the ideas from the book. One question she asked had me share a story I know from Whole Foods Market early days…

    The Whole Foods Market we know today began in 1980. That’s when John Mackey and few friends opened up a health food store. At the time, the founders didn’t have dreams of building a great brand. Instead, they had dreams of selling healthy food to people. That was their passion. However, a year after the first Whole Foods Market store opened a massive flood in Austin, TX wrecked the store.

    The founders thought all was lost.

    During the long cleanup process something special happened. Customers came to help cleanup. It was at that point the founders of Whole Foods knew they were onto something special. When their customers took time out of their personal lives to assist in cleaning up all the mud and debris, the founders realized they had created something far more than a grocery store. They had fostered a passionate community of people.

    This story has become Whole Foods Market folklore. I’m sure other successful businesses have a similar story of a specific moment in time when the founders realized they were onto to something special. If you do not know the story of why your business was founded and when it knew it truly connected with customers, then I suggest you find that story. Once you find it, you’re certain to tap into a passion conversation. *** READ MORE ***

    Mack Collier features The Passion Conversation

    Mack Collier and I go back years. We’ve both been blogging long before blogging become trendy. (Anyone here remember his MoBlogsMoProblems blogspot URL? How about his on-going ranking of the Top 25 Marketing & Social Media Blogs? I certainly do.)

    Mack is a long-time ambassador for encouraging businesses to foster brand ambassadors. Heck, he’s written a how-to book on designing social media strategies to tap into the power of brand ambassadors. He stays busy consulting, speaking, and has been gracious enough to feature THE PASSION CONVERSATION book on his blog today.

    His post is a Q&A we did and Mack came out swinging hard with questions. One of his questions wanted to know why more brands don’t create ambassador programs. My short answer included…

    Showing love to customers in order to receive love from customers is messy work. It ain’t check the box and it’s done. It’s much more than that.

    You have to treat brand ambassadors as individuals and not as customer segments. You have to be willing to let go of rigid brand guardrails and allow the ambassadors to speak in their voice and say the things they want to say in the ways they want to say them. You have to be ready to respond swiftly to the wants and needs of ambassadors. You also have to find ways to measure success because whatever results you deem as success takes time to happen.

    Loving customers over the long haul ain’t easy. It’s messy work. Not enough brands are willing to get that messy for something that takes time and isn’t easy to measure financially.”

    You can read more of Mack’s hard-hitting questions and my volley of responses on his blog. Please join us.