This might sound odd, but are there other specialty groups for your type of business, with members from various areas, whom you could ask without having their answer influenced by competition? For instance, I’m on a lot of farming lists where we talk back and forth about pricing for this-or-that farm product. We can be very honest with each other because we’re not in each other’s local markets. So for instance I can post a question to one of the groups about how they do their pricing for tomatoes amongst their various market outlets, and I’ll get a bunch of answers back from folks growing tomatoes all over the country. It might take some work to find a similar professional group within your business’s specialty, but I would think such a group would be a goldmine of info.
I do think it’s safe to assume you’ll lose some customers if you raise prices. The lower the raise, the less they’ll notice and the fewer you’ll lose. One way to do this is to figure out where you are vs where you want to be, and then figure out a way to get there incrementally. For instance, for our eggs we went from 5% below cost, to 10% above cost, all at once. The price change was dramatic – $3/doz to $5/dozen. I think it’s paramount that we got above break-even as quickly as possible, but we could have gone to say 2% over cost in 2013, then 4% over cost in 2014, then 7% over cost in 2015, then “land” on 10% over cost in 2016. Or some other kind of incrementation. If you raise prices slowly, it won’t hurt as much. And if you raise them say every year in January, most folks will understand that and start to count on it. You may have a few hiccups along the way but no one can stay at the same price forever. I’m willing to bet most of your customers are thinking “hmmm, they haven’t raised prices in a long time, wonder when they’re going to wake up and realize they need to?” So you might have less pushback than you expect, particularly if you do it slowly. Just think “lobster in the pot” and that goes a long way towards explaining how pricing works from day to day.