Every day, we're hearing more noise and concern in the media about inflation and the prospect of further dramatic cost-of-living increases across the economy. Whether these changes turn out to be temporary blips (based on pent-up demand, inventory and material shortfalls, and other scarcity factors) or longer term and more permanent structural adjustments is almost irrelevant, interestingly enough. In some ways, much like the past few years as the shares and market caps of tech stocks exploded and folks on the sideline were left in the dust, fear of missing out (FOMO) is once again top of mind for many business builders and owners.

No one really wants to miss the opportunity to get while the gettin's good by not jumping on the price hike bandwagon and goosing their prices -- if they can get away with it. I'm not talking about the crooks and price-gouging a-holes who ripped off people by charging excessive prices for masks and other PPE. I'm also not talking about the greed heads who added Covid-19 add-ons and charged extra for the packaging for carryout food you couldn't eat in their places even if you wanted to during the pandemic.

I'm talking about the tantalizing desire, and even the peer and investor pressure, to raise your prices as things start to return to the new normal. More to the point, what should you be thinking about as you make your own pricing decisions? I'm also trying to separate what you might think of as the morality of price hikes right now when millions of people are still unemployed and struggling financially from the more practical business and economic considerations relating to your own company's needs and financial stability.

It's easy, when the press would have you believe that everyone else is doing it, to feel like the smartest and simplest decision is to simply go along with the crowd. When Chipotle raises prices 4 percent and blames it on higher employee wage costs, which they claim they are simply passing on to their customers, it's not that hard to convince yourself that you should be taking some similar action.  

But, for all kinds of reasons, what's "good" for others (and maybe even smart for some of them given the likely short duration of their particular offerings -- such as Covid-19 testing or vaccine administration) doesn't necessarily make sense for you. The last thing you want to do right now is sacrifice years-long customer loyalty and relationships for some modest short-term gains in margin. Customers who think you're taking advantage of them, or the current situation, aren't coming back. People never forget how you make them feel. If anything, now might be the very best time to give your regulars a break on prices to welcome them back.  

Don't think for a minute that your customers aren't paying attention to the portions and perks that used to be part of the standard package in the "old" days. Trying to save money and avoid raising your prices through aggressive portion control and other cutbacks is a great way to lose that precious little thing called trust. Anyone who is stupid enough to think customers don't catch on to "shrinkflation" deserves to lose their customers' confidence and eventually their business. And, by the way, don't forget that your own employees are also "consumers," and they may not be that pleased to be "shorting" the folks they've served and befriended for years.

Bottom line: If you're going to raise your prices, you're also going to need to have a solid basis, an easy way to demonstrate your rationale, and an effective way to get the message out to all of the stakeholders -- customers, employees, regulators, and the media. People don't want to be marketed to; they want to be communicated with. If you do it right, carefully and thoughtfully, you can make everyone part of the effort and partners in the solution. Otherwise, things can blow up in your face pretty quickly.

So, as you make your case inside and outside your business, focus on three main messages:

1. Our business has always been about value, not price. Price is what you pay, but solid value is what you get. To continue to give you the quality, service, and value you deserve, we have to make the necessary (and more costly) investments in raw materials, supplies, resources, and other component parts of our products and services that you have come to expect.

2. Every business is a people business, and our people are the most essential element in our operations and our success. If we don't treat and compensate them fairly and fully -- not because it's a requirement, but because it's the right thing to do -- we won't be able to attract, train, and retain the high-quality dedicated and committed team that we have built, or be able to deliver the products and services to you that you desire and need.

3. The proof is always in the pudding. Ask our people if they're pleased to be back, are eager to get to work, and have been treated and paid equitably throughout this long and painful journey. There's no better way to see if we're living up to our side of the bargain and taking care of business than to ask the team members who make our business possible every day just how we're doing. We're glad they're back; we're glad you're back, and we're all seeing a little light at the end of this very dark and lengthy tunnel. Tough times don't last; tough people do.