Last week I ordered tickets to a spring training baseball game, and it was another demonstration of the power of multi-part pricing. By that I mean the amount the customer ultimately pays includes multiple components, and they add up to more than the headline amount. When we experience multi-part pricing, i.e., pay the extras, we often grumble about it. However, we generally pay the extra fees and come back again, proving that multi-part pricing strategies can be very effective.
I read an article in the Wall Street Journal Friday, New Worry for CEOs: Rising Costs From Metals to Meat, that discussed recent increases in inflation. Curiously, the article subtitle was Companies could be forced to raise prices or eat the additional expense. I think they have it wrong. Companies should look at this as an opportunity to raise prices and correct underpriced products and customers. Having the right pricing strategies for inflationary markets will help.