03 Feb The RIGHT reason to increase prices
I’ve shared before in my blog posts that at MMD, oftentimes we make decisions that prioritize doing the right thing over profiting. It’s not that trying to increase profits is “the wrong thing”, obviously, but I think that if you’re going to intentionally try to profit more (by taking an action like raising your prices), it should be for the right reasons. That extra money should be used to benefit people other than yourself, or to create something new and innovative that has a positive impact on your community or the planet. A rising tide lifts all boats, as they say
In 2020, we increased our prices at MMD for the first time in a couple of years. I was able to do this confidently because I knew I wasn’t just doing it for the hell of it, or “because of inflation”. My plan (which I have now successfully executed) was to use the additional profits created by our price hike to give back to the business, provide cost of living raises, start up an employee gain share program, hire new staff, and reinvest into infrastructure at our brick and mortar location.
It was very important to me that my employees benefit in a measurable way from the price increase, because I want them to know how valued they are. Not just so that they’ll stick around and continue to work for me, but because I’ve experienced firsthand what a difference it can make to someone’s long-term career to have a boss who teaches you (through strategically rewarding your efforts) that you are making a meaningful contribution through the way you do your job, and that your gifts and skills and even your quirks are worthy of recognition.
(Speaking of recognition, one thing that we do at MMD is give each other fake dollar bills called Chompy Bucks – named after Chompers the dog, our mascot – when we see another team member going above and beyond at work. If you want to know how our Chompy Bucks system works, shoot me an email, and I’ll be happy to share it with you!)
It can be scary to actually pull the trigger when you’re raising prices. It takes balls (lady balls, in my case) to do it, because it triggers the fear of judgment in you. “What will ___ say about this?”, you’ll probably find yourself worrying. Well, I don’t have the perfect answer for how to get over those fears, but what I HAVE found is that the process will be much easier if you know deep down within yourself that you’re truly in a position to raise prices ethically. Not only should you be attempting to increase profits through the price hike for the right reasons (in order to benefit your team through better salaries, giving them the experience of being valued as human beings), but it also really helps to know that the way you conduct your business is entirely fair-minded and good-hearted (something that not a lot of businesses can say about themselves today).
At MMD, we always try to help our customers out by keeping their costs as low as possible. For example, if we have an almost-full truck going out for delivery, and we also have some products that are ready to go out to a customer who runs a one man show, we’ll try to squeeze his order into the truck so that he doesn’t have to pay a delivery fee for a separate delivery. We serve our customers from a place of complete honesty and integrity, while also brightening their days through their fun and friendly interactions with us. And because we focus so much on doing right by our customers here at MMD, I was able to raise our prices with a sense of worth and confidence behind it. I knew that for decades now, we’d been delivering something above and beyond what our competitors do – something intangible yet priceless – even though we sell very similar products to theirs. See the difference?
Ultimately, nobody likes to feel taken advantage of, and raising your prices can create that experience in your customers’ hearts and minds, which is almost always going to be a horrible thing for your business. So, if you’re going to try to profit more by raising prices, it’s got to be done with a conscience. It’s not like you’re going to get a magical gold star that falls out of the sky if you choose to do it this way, but you’ll sleep much better at night, and in the long run, it will be the better way forward for everyone.