There’s little question that inflation has been the year’s dominant economic story, impacting consumers and business owners alike.

Stemming from the shockwaves of the pandemic and its attendant supply chain disruptions, inflation continues to be a real burden to those who work in the trade services. In particular, many business owners wonder: How should pricing be adjusted to reflect these broader macroeconomic trends?

Here are a few guidelines to consider to ensure reasonable and effective pricing in this current, inflationary environment:

Adjust discounting and promotions

During inflation, price increases are simply a given. However, companies that routinely address total customer and product profitability are better positioned to weather inflationary seasons than those that emphasize cost changes. Focusing more on the big picture of customer and product profitability can actually limit the size and frequency of your price increases, while allowing you to remain profitable.

One simple application for trade service companies: Instead of one-size-fits-all pricing for service calls, consider surcharges and fees for rush jobs or for projects that don’t meet a minimum profitability threshold.

Tailor price adjustments to customers

Different customers will have different reactions to price increases, based on how price-sensitive they are and how much inflation has impacted them overall. Making broad price adjustments can erode trust in your brand, so a better option is to take a more surgical approach, tailoring price increases to the customer and to the type of product or service.

For example, you may want to pass along most of your cost increases through secondary or tertiary items, allowing your business to remain competitive with big-ticket items and to avoid any undue customer sticker shock.

Take a broad approach to decision-making

Something else to keep in mind: Inflation-based price adjustment is seldom a one-and-done thing. Instead, you’ll need to be nimble, monitoring customer response to price increases and planning for any future adjustments you need to make.

As such, you’ll want to involve all team members in pricing decisions. Get feedback from service technicians, sales representatives, and front office staff. Keep tabs on how price increases are going over with customers, how they are affecting cross-promotional sales, what kinds of questions are being asked, and more.

Consider multiple options to control costs

Price increases will likely be necessary, yet they are not the only option for cost reduction. 

There are a number of other considerations for keeping costs in check, including:

• Sourcing for preferred vendors, suppliers, or subcontractors
• Minimizing inventory
• Changing routing and dispatch priorities to control fuel costs

The bottom line: Companies all need to monitor costs right now, and price adjustment is one way to do that. But don’t let it be the only one.

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About the author: Amanda E. Clark is the president and editor-in-chief of Grammar Chic, a full-service professional writing company. She is a published ghostwriter and editor, and she's currently under contract with literary agencies in Malibu, California and Dublin. Since founding Grammar Chic in 2008, Clark, along with her team of skilled professional writers, has offered expertise to clients in the creative, business and academic fields. The company accepts a wide range of projects; often engages in content and social media marketing; and drafts resumes, press releases, web content, marketing materials and ghostwritten creative pieces. Contact Clark at www.grammarchic.net.