December 1, 2025 • 14 mins
Why Business owners fear price increases and what they really should be focused on when it comes to pricing.
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Become a supporter of this podcast: https://www.spreaker.com/podcast/powerful-business-strategies--6198916/support.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:04):
Hi, you have done to the censure Wow for you your.
Speaker 2 (00:19):
This is the pipe Man here on the Adventures pipe
Man W four c Y Radio with our Positively Pipeman
segment featuring Michael Barbarita from Powerful Business.
Speaker 3 (00:31):
Strategies and Next Step CFO. How are you Michael?
Speaker 1 (00:35):
Excellent? How are you dating?
Speaker 2 (00:37):
I'm doing great? And I'll tell you what well you're
going to talk about today could be more appropriate right
now because okay, you're going to talk about increase prices
and that is happening everywhere.
Speaker 3 (00:55):
Yes, so let's talk about it.
Speaker 1 (00:57):
But unfortunately my clients, at least at least in the
experiences I have, they have a fear relative to increasing prices. Yeah, yeah,
it is a fear. But what the data shows is
that customers who focus solely on price often require more
(01:19):
time and attention. They're the loudest and demanding value versus
those who do not rely on price necessarily, right, those
are the ones that should be entitled to the best treatment,
and when you do give them the best treatment, they
then have fewer complaints and are easy to deal with.
(01:39):
So that's like the baseline that I'd like to present
relative to increase prices. The other thing that is interesting
is that when clients of mind make small incremental price
increases every quarter or so, so over time, they do
(02:02):
a couple of things. Number One, it gives them it
allows them to increase prices eventually where they should be.
Speaker 3 (02:09):
Number one.
Speaker 1 (02:09):
But number two, it also gives them time to increase
the value of what they're offering to justify these price increases.
But when they happen small and incrementally, they hardly get noticed.
So the but the reason why business owners fear price
increase is because the business owner's perception is that there's
(02:30):
no discernible difference between the value that they bring and
the value that competitors bring. So, in other words, they
don't think that they think that it's only about price,
and so therefore, if I increase my prices, I'm going
to lose customers. That's what they think. Now. One of
the tools that we have at next Step CFO is
(02:53):
we can show you that how many customers you can
afford to lose you give us the price increase that
can plan on having. We could show you how many
customers you can afford to lose and still make the
same profit that you did before before you had the
price increase. So that is usually very convincing to customers,
(03:13):
actually to clients to actually increase their prices, because what
they find out most of the time is they can
lose ten to fifteen percent of their customer base, which
they don't think would happen in a million years, and
still make the same amount of money that they did
before the price increase. And the other fear that the
(03:33):
business owner has is the business owner uses their own
financial position, their own wallet, as a benchmark for determining
what a consumer can afford. And that is totally.
Speaker 2 (03:44):
Bad practice, totally, And I'll add to that too, because
business owners tend to also speaking in their own wallet.
If they don't increase prices, they take money out of
their wallet to pay the increased expenses they have.
Speaker 1 (04:00):
That's right, that's right. I have clients that fear it
so much, and you know, things like insurance are going up,
and every other expense you could think of is increasing,
and they're still hesitant, and despite the fact that I
show them they could lose in some In one case,
I showed a client how he could lose twenty percent
(04:21):
of his current customer base and still make the same
amount of money that he's making now that he made
before the price increased, still won't do it, so that
fear that perception that there's no discernible difference. And I
have some clients that have discernible, different, clear, discernible differences
(04:42):
why they are better, Yet they still are hesitant to
increase price, and they use their own wallet. They use
their own wallet to determine. You know, I don't think
I could afford it, so therefore I'm not going to
charge that price. So it's just and so it's real.
And when you come right down to it, it's really
(05:02):
not about price. It's about the value that you're delivering
versus your competitors. And if you really don't believe that
you offer more value than your competitors, I'm wondering why
you're in business.
Speaker 2 (05:14):
Right, And I'll also say that, like, if your customers
perceive value then and they see that prices are increasing everywhere, Yeah,
and they may not like the price increase, but it's
not going to make them stop doing business with you
if they still see the value.
Speaker 1 (05:32):
That's right. And here's the thing. Here's a rule of
thumb that I use with clients. What I ask, what
your closing rate is and if your closing rate is
between twenty five and thirty three percent, I think your
price rate, if your closing rate is below twenty I'm sorry,
(05:52):
is higher than thirty three percent. Your prices are too low.
And that's a benchmark that I use when I'm talking
to clients. You know, they're pounding their chess because their
closing rate is so high. But the reason why their
closing rate is so high is their prices are too low, right,
And so if you could fall between that twenty five
and thirty three percent closing rate, you're probably priced correctly,
(06:16):
you know. And if you're below that, you're probably priced
too high.
Speaker 2 (06:20):
And think about all those companies in history that didn't
lower raise prices. They kept the prices super low. Okay,
they they're not in business today, but their closing rate
was very high because people were buying from them because
it was so cheap.
Speaker 1 (06:40):
Right, that's right. And you know, here's something that adds
value that that actually Japanese auto dealerships do. What they
do is they provide potential customers when they come in
with a small drink menu on eliminated card, and there's
no big cost to that. You know, they they probably
(07:00):
have four or five variety of drinks from soft drinks
and water and that kind of stuff. But you know,
what if your bank did this for you, What if
a spot did it. What if a doctor in a
waiting room did it, what if a hair salon did it?
You know, these are that these are just different, small
little things that add value at a low cost.
Speaker 3 (07:21):
Yeah, totally.
Speaker 2 (07:25):
I mean, I was just saying, it's just common sense.
You own a business, your prices are increased. You have
to increase your prices to a customer to stay in
business and flourish, you know. And yes, there's some people
that aren't going to understand that. There's some people that
(07:45):
aren't gonna like it, but you're always going to have
people fall off.
Speaker 3 (07:51):
And I want to put it that way. It's kind
of like the band.
Speaker 2 (07:54):
That they start getting commercial, they're no longer a garage band,
and they're they're followers. They're small group of followers in
the underground. Are going to be like, oh, I'm not
gonna listen to them anymore.
Speaker 3 (08:08):
They sold out, blah blah blah.
Speaker 2 (08:10):
Okay, so you lost like twenty five people in game
two million, that's right. You don't think of that that's right.
Speaker 1 (08:17):
And you know it goes back to what I said
at the very beginning. When you increase prices, you get
rid of the rid of the pain the next right, yes, yes,
stop pricing all those pain in the next customers that
are demanding more value from you at a lower price.
Speaker 3 (08:32):
Oh, I just had that recently.
Speaker 2 (08:34):
Okay, I have somebody that negotiates with me every single time,
and it's and I'm just like, no, you know, because
you know, it's always the ones that want you to
give them the most that want you to charge the least.
Speaker 1 (08:50):
Right, that's right. For whatever reason. I don't know the reason.
It's a large nature of some sort, but that's exactly
what happens.
Speaker 2 (09:00):
It's true in every business. When I was in the
financial business, the people that sent me five thousand would
call fifty times a day. The people that sent me
a million never called me, and if I called them,
I was annoying them.
Speaker 3 (09:12):
Just do whatever. I don't care, you know, right.
Speaker 2 (09:17):
And the reason I bring up that example is because
there is an answer of why they do it. It's
because the people that spend the least that money means
the most to them. The money carries way more value
than the person that spends the most with you.
Speaker 3 (09:36):
Interesting.
Speaker 1 (09:37):
Yeah, yeah, no, I find that. But I find that
there's just tremendous resistance from my clients to increase prices.
And when they do, they're breathing a sigh of relief
because they see the benefits on the p and L.
I mean, it's just, it's just it's just a simple
strategy that could be employed. But I want to stress
(09:59):
the fact that as you incrementally increase prices, nice and
small incremental increases, always figure out ways to add more value.
And yeah, if you do, and if you do that,
you'll be way ahead of the game and you'll and
the price increases will be hardly noticed, and if they
are noticed, they'll be justified with more value.
Speaker 2 (10:18):
It could be small too, like whatever you offer them
could be a small thing, not a big deal, you know.
And the fact of the matter is nobody likes paying
higher prices. But after a while it becomes the norm.
Like how many of us at our generation, the norm
(10:39):
for a gallon of gas was eighty five cents, and
now when it goes under three dollars, we're like, oh
my god, what a bargain.
Speaker 3 (10:50):
Yeah.
Speaker 1 (10:50):
Customer psychology totally.
Speaker 3 (10:54):
Yeah.
Speaker 2 (10:54):
So just a couple of.
Speaker 1 (10:57):
Questions that a business owner should ask themselves is you know,
what can I do better this month to make customers
feel more appreciated, because that's this is part of that
adding more value stuff, and it makes it easier when
a client, when a business owner adds more value, it
makes it easier for them to make the decision to
increase price. So that's a good question to that people
(11:20):
should be asking themselves as they're going through this process
and making small incremental price increases over time.
Speaker 2 (11:29):
My example of that is what I do is because
I give human customer service instead of AI.
Speaker 3 (11:39):
So like, to me, that's a lot of value.
Speaker 2 (11:42):
To me, that's a lot of value because no matter
what company I call, if I'm dealing with AI or
I'm dealing with somebody that doesn't understand what I'm looking
for and they're just reading the script, like I lose
my mind, man. But if I can talk to a
human being, and usually the human being will make me
feel good.
Speaker 3 (12:06):
Yeah.
Speaker 1 (12:06):
So what I'd like to offer the audience too, if
they're so inclined, as I have a workbook that I
have called increased Prices, and it's an actual step by
step workbook of how to get over the psychology of
increasing prices, as well as the strategies used to add
more value and some of the concepts that we talked
about today. And if they would like that, they could
(12:28):
just go to my website next step CFO dot net
and then go to the contact page and put it
in Workbook on Increased Prices after they fill out the
contact form the message box, just put workbook on increased
Prices and I'll send it to them.
Speaker 3 (12:47):
Nice. I love it, so thank you so much.
Speaker 2 (12:53):
You give us such great insight for businesses, and I
think people need it more than ever right now because
of a lot of reasons pricing, technology changes, evolution or
you know, if you're a business right now opposed to
fifty years ago, you can't afford to snooze for even
(13:15):
a day, okay, Like you have to be on top
of it what you're going to do to provide more
value and to be able to sustain profitability. Like you know, listen,
everybody would love to say like they bought something at cost,
(13:36):
but companies can't survive that way, Okay, So you have
to be the type of mentality that's like you're okay
with the business making a profit, but as long as
that value that you're getting is worth that profit. So
thanks for all this great advice.
Speaker 3 (13:53):
Everybody.
Speaker 2 (13:54):
Increase your prices and increase your value, and pay attention
to Michael Barberie and check and check out next Step
CFO and you too could not only get this workbook,
but could get help in your business to grow.
Speaker 3 (14:12):
So thanks once again.
Speaker 2 (14:14):
We'll see you next week on the Positively Pipemin segment
of the Adventures of Pipemin.
Speaker 1 (14:19):
Thank you pleasure to be here. Thank you for listening
to the Adventures of Pipemin on w for CUI Radio.
Hi, you have done to the censure Wow for you your.
Speaker 2 (00:19):
This is the pipe Man here on the Adventures pipe
Man W four c Y Radio with our Positively Pipeman
segment featuring Michael Barbarita from Powerful Business.
Speaker 3 (00:31):
Strategies and Next Step CFO. How are you Michael?
Speaker 1 (00:35):
Excellent? How are you dating?
Speaker 2 (00:37):
I'm doing great? And I'll tell you what well you're
going to talk about today could be more appropriate right
now because okay, you're going to talk about increase prices
and that is happening everywhere.
Speaker 3 (00:55):
Yes, so let's talk about it.
Speaker 1 (00:57):
But unfortunately my clients, at least at least in the
experiences I have, they have a fear relative to increasing prices. Yeah, yeah,
it is a fear. But what the data shows is
that customers who focus solely on price often require more
(01:19):
time and attention. They're the loudest and demanding value versus
those who do not rely on price necessarily, right, those
are the ones that should be entitled to the best treatment,
and when you do give them the best treatment, they
then have fewer complaints and are easy to deal with.
(01:39):
So that's like the baseline that I'd like to present
relative to increase prices. The other thing that is interesting
is that when clients of mind make small incremental price
increases every quarter or so, so over time, they do
(02:02):
a couple of things. Number One, it gives them it
allows them to increase prices eventually where they should be.
Speaker 3 (02:09):
Number one.
Speaker 1 (02:09):
But number two, it also gives them time to increase
the value of what they're offering to justify these price increases.
But when they happen small and incrementally, they hardly get noticed.
So the but the reason why business owners fear price
increase is because the business owner's perception is that there's
(02:30):
no discernible difference between the value that they bring and
the value that competitors bring. So, in other words, they
don't think that they think that it's only about price,
and so therefore, if I increase my prices, I'm going
to lose customers. That's what they think. Now. One of
the tools that we have at next Step CFO is
(02:53):
we can show you that how many customers you can
afford to lose you give us the price increase that
can plan on having. We could show you how many
customers you can afford to lose and still make the
same profit that you did before before you had the
price increase. So that is usually very convincing to customers,
(03:13):
actually to clients to actually increase their prices, because what
they find out most of the time is they can
lose ten to fifteen percent of their customer base, which
they don't think would happen in a million years, and
still make the same amount of money that they did
before the price increase. And the other fear that the
(03:33):
business owner has is the business owner uses their own
financial position, their own wallet, as a benchmark for determining
what a consumer can afford. And that is totally.
Speaker 2 (03:44):
Bad practice, totally, And I'll add to that too, because
business owners tend to also speaking in their own wallet.
If they don't increase prices, they take money out of
their wallet to pay the increased expenses they have.
Speaker 1 (04:00):
That's right, that's right. I have clients that fear it
so much, and you know, things like insurance are going up,
and every other expense you could think of is increasing,
and they're still hesitant, and despite the fact that I
show them they could lose in some In one case,
I showed a client how he could lose twenty percent
(04:21):
of his current customer base and still make the same
amount of money that he's making now that he made
before the price increased, still won't do it, so that
fear that perception that there's no discernible difference. And I
have some clients that have discernible, different, clear, discernible differences
(04:42):
why they are better, Yet they still are hesitant to
increase price, and they use their own wallet. They use
their own wallet to determine. You know, I don't think
I could afford it, so therefore I'm not going to
charge that price. So it's just and so it's real.
And when you come right down to it, it's really
(05:02):
not about price. It's about the value that you're delivering
versus your competitors. And if you really don't believe that
you offer more value than your competitors, I'm wondering why
you're in business.
Speaker 2 (05:14):
Right, And I'll also say that, like, if your customers
perceive value then and they see that prices are increasing everywhere, Yeah,
and they may not like the price increase, but it's
not going to make them stop doing business with you
if they still see the value.
Speaker 1 (05:32):
That's right. And here's the thing. Here's a rule of
thumb that I use with clients. What I ask, what
your closing rate is and if your closing rate is
between twenty five and thirty three percent, I think your
price rate, if your closing rate is below twenty I'm sorry,
(05:52):
is higher than thirty three percent. Your prices are too low.
And that's a benchmark that I use when I'm talking
to clients. You know, they're pounding their chess because their
closing rate is so high. But the reason why their
closing rate is so high is their prices are too low, right,
And so if you could fall between that twenty five
and thirty three percent closing rate, you're probably priced correctly,
(06:16):
you know. And if you're below that, you're probably priced
too high.
Speaker 2 (06:20):
And think about all those companies in history that didn't
lower raise prices. They kept the prices super low. Okay,
they they're not in business today, but their closing rate
was very high because people were buying from them because
it was so cheap.
Speaker 1 (06:40):
Right, that's right. And you know, here's something that adds
value that that actually Japanese auto dealerships do. What they
do is they provide potential customers when they come in
with a small drink menu on eliminated card, and there's
no big cost to that. You know, they they probably
(07:00):
have four or five variety of drinks from soft drinks
and water and that kind of stuff. But you know,
what if your bank did this for you, What if
a spot did it. What if a doctor in a
waiting room did it, what if a hair salon did it?
You know, these are that these are just different, small
little things that add value at a low cost.
Speaker 3 (07:21):
Yeah, totally.
Speaker 2 (07:25):
I mean, I was just saying, it's just common sense.
You own a business, your prices are increased. You have
to increase your prices to a customer to stay in
business and flourish, you know. And yes, there's some people
that aren't going to understand that. There's some people that
(07:45):
aren't gonna like it, but you're always going to have
people fall off.
Speaker 3 (07:51):
And I want to put it that way. It's kind
of like the band.
Speaker 2 (07:54):
That they start getting commercial, they're no longer a garage band,
and they're they're followers. They're small group of followers in
the underground. Are going to be like, oh, I'm not
gonna listen to them anymore.
Speaker 3 (08:08):
They sold out, blah blah blah.
Speaker 2 (08:10):
Okay, so you lost like twenty five people in game
two million, that's right. You don't think of that that's right.
Speaker 1 (08:17):
And you know it goes back to what I said
at the very beginning. When you increase prices, you get
rid of the rid of the pain the next right, yes, yes,
stop pricing all those pain in the next customers that
are demanding more value from you at a lower price.
Speaker 3 (08:32):
Oh, I just had that recently.
Speaker 2 (08:34):
Okay, I have somebody that negotiates with me every single time,
and it's and I'm just like, no, you know, because
you know, it's always the ones that want you to
give them the most that want you to charge the least.
Speaker 1 (08:50):
Right, that's right. For whatever reason. I don't know the reason.
It's a large nature of some sort, but that's exactly
what happens.
Speaker 2 (09:00):
It's true in every business. When I was in the
financial business, the people that sent me five thousand would
call fifty times a day. The people that sent me
a million never called me, and if I called them,
I was annoying them.
Speaker 3 (09:12):
Just do whatever. I don't care, you know, right.
Speaker 2 (09:17):
And the reason I bring up that example is because
there is an answer of why they do it. It's
because the people that spend the least that money means
the most to them. The money carries way more value
than the person that spends the most with you.
Speaker 3 (09:36):
Interesting.
Speaker 1 (09:37):
Yeah, yeah, no, I find that. But I find that
there's just tremendous resistance from my clients to increase prices.
And when they do, they're breathing a sigh of relief
because they see the benefits on the p and L.
I mean, it's just, it's just it's just a simple
strategy that could be employed. But I want to stress
(09:59):
the fact that as you incrementally increase prices, nice and
small incremental increases, always figure out ways to add more value.
And yeah, if you do, and if you do that,
you'll be way ahead of the game and you'll and
the price increases will be hardly noticed, and if they
are noticed, they'll be justified with more value.
Speaker 2 (10:18):
It could be small too, like whatever you offer them
could be a small thing, not a big deal, you know.
And the fact of the matter is nobody likes paying
higher prices. But after a while it becomes the norm.
Like how many of us at our generation, the norm
(10:39):
for a gallon of gas was eighty five cents, and
now when it goes under three dollars, we're like, oh
my god, what a bargain.
Speaker 3 (10:50):
Yeah.
Speaker 1 (10:50):
Customer psychology totally.
Speaker 3 (10:54):
Yeah.
Speaker 2 (10:54):
So just a couple of.
Speaker 1 (10:57):
Questions that a business owner should ask themselves is you know,
what can I do better this month to make customers
feel more appreciated, because that's this is part of that
adding more value stuff, and it makes it easier when
a client, when a business owner adds more value, it
makes it easier for them to make the decision to
increase price. So that's a good question to that people
(11:20):
should be asking themselves as they're going through this process
and making small incremental price increases over time.
Speaker 2 (11:29):
My example of that is what I do is because
I give human customer service instead of AI.
Speaker 3 (11:39):
So like, to me, that's a lot of value.
Speaker 2 (11:42):
To me, that's a lot of value because no matter
what company I call, if I'm dealing with AI or
I'm dealing with somebody that doesn't understand what I'm looking
for and they're just reading the script, like I lose
my mind, man. But if I can talk to a
human being, and usually the human being will make me
feel good.
Speaker 3 (12:06):
Yeah.
Speaker 1 (12:06):
So what I'd like to offer the audience too, if
they're so inclined, as I have a workbook that I
have called increased Prices, and it's an actual step by
step workbook of how to get over the psychology of
increasing prices, as well as the strategies used to add
more value and some of the concepts that we talked
about today. And if they would like that, they could
(12:28):
just go to my website next step CFO dot net
and then go to the contact page and put it
in Workbook on Increased Prices after they fill out the
contact form the message box, just put workbook on increased
Prices and I'll send it to them.
Speaker 3 (12:47):
Nice. I love it, so thank you so much.
Speaker 2 (12:53):
You give us such great insight for businesses, and I
think people need it more than ever right now because
of a lot of reasons pricing, technology changes, evolution or
you know, if you're a business right now opposed to
fifty years ago, you can't afford to snooze for even
(13:15):
a day, okay, Like you have to be on top
of it what you're going to do to provide more
value and to be able to sustain profitability. Like you know, listen,
everybody would love to say like they bought something at cost,
(13:36):
but companies can't survive that way, Okay, So you have
to be the type of mentality that's like you're okay
with the business making a profit, but as long as
that value that you're getting is worth that profit. So
thanks for all this great advice.
Speaker 3 (13:53):
Everybody.
Speaker 2 (13:54):
Increase your prices and increase your value, and pay attention
to Michael Barberie and check and check out next Step
CFO and you too could not only get this workbook,
but could get help in your business to grow.
Speaker 3 (14:12):
So thanks once again.
Speaker 2 (14:14):
We'll see you next week on the Positively Pipemin segment
of the Adventures of Pipemin.
Speaker 1 (14:19):
Thank you pleasure to be here. Thank you for listening
to the Adventures of Pipemin on w for CUI Radio.
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