Mylan’s EpiPen epic price hike PR fail is a valuable lesson for all entrepreneurs and established businesses. No matter what industry you are in or who your customers are, there’s simply no immunity to the laws of supply and demand, to the dynamics of the business world, or to market economics. At some point, you will have to raise your prices and there’s no worse way to do so than Mylan’s EpiPen price hike debacle.
Mylan’s EpiPen Epic Price Hike PR Fail a Valuable Lesson
Like Elizabeth Holmes and Theranos, customers lost deep-seated trust when problems with the technology became public. While there isn’t a problem with the technology in this case, the company’s decision to hike the EpiPen product price did not receive welcome customer sentiment. After all, this is a life-saving product and human life is priceless. Now, the company is announcing it will make a generic priced 50 percent less than its premium counterpart.
It’s time for raising prices to keep up with inflation and ensure your business continues to grow. However, instituting a price hike without angering customers can be challenging, and the majority of self-employed professionals actually charge less than they truly deserve. While it’s natural to be wary about pricing issues, the fact is that undervaluing your products and services will only hurt your business in the end. Fortunately, there are steps you can take to avoid losing clients when you raise your fees. —Intuit QuickBooks
This offering comes as a pseudo apology and is the company’s way of trying to undo its self-inflicted public relations’ damage. The fact of the matter is, business must deal effectively with change for a variety of reasons. Your expenses will rise, it’s just inevitable. The lease won’t be cheaper a year or two from now, all supplies will cost more, material costs will rise, as will all expenses. While you might have the margin to hold off on raising your prices now, there will come a time when absorption no longer feasible. When it does come time to raise your business’ prices, here are some helpful tips to follow to make it a smoother transition:
- Be transparent and upfront. There’s just no way to stealthily raise your business’ prices and any attempt to conceal it will be nothing less than futile. While you might quietly implement changes, your customers will know when prices are going up. If you do try to sneak it past your customers, you’ll do far more harm than good in several ways. Do yourself and your company a favor — be transparent and upfront about your price increase.
- Thank each of your customers. When you decide to raise your business’ prices, you should go the extra mile and thank each of your customers. Do so in-person, if possible. If that isn’t an option, reach out personally. Be sincere and let your customers know that you are always willing to discuss the matter.
- Explain your rising costs honestly. Raising prices is never a popular decision in customers’ minds. But this is an opportunity to pull back the curtain by explaining which of your expenses are rising. It’s also a prime time to speak with customers you have a personal connection with about alternatives to raising your prices. Listen to their input and take their sincere suggestions seriously.
- Offer one or more lower-priced options. One of the best ways to mitigate a price hike is to offer a lower-priced option. Let your customers know all about it, including its qualities and benefits, and not just the lower price. This is a great retention tool and shows you are committed to your customers’ wants and needs.
- Add a little more value and over-deliver. Another way to mitigate a price increase is to offer a little more value. In addition, it’s helpful to over-deliver when possible. Doing so clearly demonstrates your goodwill and reinforces the value of your customers to your business.
How have you dealt with a price hike situation? Are there other helpful suggestions you have for making such a change? What’s your best pricing strategy and how has it helped you succeed?