Pricing is always an important issue for customers. No one likes to feel that they are being ripped off. I really believe that most customers are prepared to pay a little more for a product if it's more convenient to buy from a particular business or if the service is generally better. But there is a limit.
Setting prices is difficult. Having a price rise is also a touchy point. When setting your prices there are a number of factors to be considered. How much does your competition charge for the same product? If you don't know, you should find out. Is the product that you are offering better? Are there realistic reasons that could enable you to charge more? Consumers today have a lot of choice, so if you are going to charge more you really need to be able to justify it. Likewise, if you are going to price yourself low, so that you undercut your competition, is this sustainable? Will your business be able to survive at these lower prices and consequent lower profit margins?
You need to make a conscious decision about how you want to attract your customers. Ideally, you may be able to win them over on price and service, and this is a good objective. But many businesses are able to charge a premium because they have a long history of being good at what they do, or they may stock a premium product that is in demand, regardless of price. Put simply, if you aren't trying to attract customers based purely on price, your service needs to be very good.
Deciding to raise prices is also a difficult dilemma. Prices have to go up - as consumers we are very aware of this point, but we still don't like it. I witnessed this in action recently. In Australia a goods and services tax of 10 per cent was introduced a while ago. I was in a health food shop for a meeting (believe it or not) on the first day of the new tax regime. The business had decided that today they would add the tax, as well as their own price rise, to the cost of all their products. The result was that a drink went from $3.00 to $3.60 overnight. That morning there were a lot of unhappy people storming out of the business, telling the owner that they wouldn't be returning. The new tax was understandable, but the other price rise was simply too much for the customers to accept.
Many businesses increase their prices without really thinking it through. The health food business mentioned above quickly lowered their prices, but the damage had already been done.
Talk to your customers and explain any price rises. If your costs have gone up, explain this and ensure that you can justify your proposed price rise. Customers can accept logical price rises. It's also easier for them to accept more regular small price rises than one big one every few years.