How to Approach Increasing Your Prices in Response to Inflation: Mark Stiving and Steven Forth in conversation
Steven Forth is a Managing Partner at Ibbaka. See his Skill Profile on Ibbaka Talent.
Many are debating the implications of inflation for price increases. In this podcast, on Mark Stiving’s popular Impact Pricing Podcast Channel, Mark and Steven debate how we should respond to inflation and what it means for pricing.
One perspective is that inflation creates a context where price increases are expected, justified and will be accepted. Large organizations like IBM have used higher costs as a reason for broad price increases.
At the same time though, Microsoft has found buyers becoming cost conscious over the past few months, putting price pressure on popular bundles with buyers opting for cheaper more targeted packages.
What is the right pricing response?
Ibbaka’s point of view is that any pricing actions should be
Surgical and depend on how much value you are creating for customers (V2C) and how much value the customer is providing back (LTV)
Dependent on how well your customers are doing and how they are responding to the changed economic conditions
Based on a long-term plan for how pricing will set up your business for when the economy recovers
Some further thoughts on this can be found in these posts.
Before taking pricing action manage discounting
Customer segmentation for price increases
Other people on the Ibbaka team, Ed Arnold and Karen Chiang, have also been featured on the Impact Pricing Podcast Channel.