Getting In-Front of The Price-Increase Curve…..

By Sid Chadwick

“We don’t see things as they are….we see them as we are…”…AnaisNin

INTRODUCTION:

“How am I supposed to pass on the price increases we’re receiving… to our customers…?”

I’ve heard words to that effect several times over the last several weeks. Today, on a Zoom call with a key supplier and affected Peer Group Members, I heard that “resin prices” are going up from Texas suppliers …40%-60%.... if… you can get the resin you need  – between now and the end of the year.

In the mid-80’s, with double-digit inflation, I frequently was required to write letters to our customers, raising prices (“Four-times” – in one 12-month stretch of time).

I remember one customer writing, “Someone in your company has a lot of guts….”

What I remember is that we did not want any customer thinking we were price gouging……!

1. We asked our suppliers what to expect – this….and next year re. price increases.
2. We asked our suppliers to explain to us, in plain English, “Why the price increases?”  Put it on your letterhead – for us to reproduce -- and attach to our letters to our customers.
3. We  worked to give our customers, “30 days advance notice to buy ahead of the price increases.” Most of them did, and were grateful for the advance notice. (We also, for those with proper credit, extended special terms….!)
4. In today’s climate, many of your institutional customers have budgets they need to spend this quarter, and “would appreciate ‘advance billing’.” How many institutional customers have you called – here, at the end of this 1^st Qtr, with that offer….? (Whether or not they are able to take-you-up on such an offer, they’ll probably appreciate your thoughtfulness in asking the question.)

SUMMARY:

Disruptive changes create opportunities….for those with courage… and integrity.  

Some suppliers and their Reps – run the other way, hoping someone from the office…or a competitor… will take care of unpleasant communications to their customers…first.

Smart customers and buyers…over time….quietly….silently….learn who they can trust.

I’ll hopefully never forget the Rep who lost 7-figures of business for his company… because he wasn’t made to, or assisted – with giving customers bad news….when it was due.

Eventually, his CSR and President also refused to do his “heavy lifting”… for him.

“I shall tell you a great secret, my friend…Do not wait for the last judgment…it takes place every day.”……………Albert Camu