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High Performance: How to flip the script on raising prices

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(Photo: Kozlik_Mozlik / iStock / Getty Images Plus / Getty Images)
(Photo: Kozlik_Mozlik / iStock / Getty Images Plus / Getty Images)
(Photo: Kozlik_Mozlik / iStock / Getty Images Plus / Getty Images)
(Photo: Kozlik_Mozlik / iStock / Getty Images Plus / Getty Images)

In our first scene, we see Candy the contractor facing a dilemma. She needs to raise prices on Polly, the property manager, but she’s not sure how to do so because Candy and Polly are in a multi-year contract. On top of that, Polly has been a long-time, loyal customer and Candy doesn’t want to mess up their relationship.

Quiet on the set! And, action.

 

Scene 1

Polly (on the phone): Candy, I got your text. You said we need to talk. Is there a problem?

Candy: Nothing that can’t be solved. When can we meet? I’d like to talk about this in person.

Polly: I have to say, you have me worried.

Candy: I promise it’s nothing major. But I would like to meet to discuss this in person.

Polly: I’m open for lunch today.

Candy: Great! I’ll see you then.

 

Scene 2: Setting is a local diner for lunch

Candy: Thanks for meeting. Before we order, I’ll get right to it. We need to raise our prices.

Polly: But we have two more years on our current contract.

Candy: I understand. None of us could have anticipated what we’re seeing across the board — huge increases in labor costs, fuel, materials, supplies, equipment — you name it. We’re getting hit from every side.

Polly: I know. I see it too. We’re all feeling it. But we signed a multi-year agreement for a reason.

Candy: Yes, we both did. We entered into the agreement based on a set of assumptions that have been shown to be wrong. That’s why we’re meeting today.

Polly: I can’t just approve price increases. What are you asking me to do?

Candy: I’m asking you to put yourself in our shoes and understand the situation we’re in.

Polly: I can’t pass along prices increases to my tenants just like that.

Candy: I understand that this is not easy.

Polly: What if I can’t help you?

Candy: I hope that’s not the case, but we would be forced to exercise our rights under the 30-day termination clause in our agreement.

Polly: You would do that to us?

Candy: We see that as a last resort and certainly hope we don’t end up there.

Polly: That would be unfortunate.

Candy: I agree. And the reality is that you would then have to hire a replacement for us at current prices, which are the same prices I’m asking for.

Polly: Good point. And then we would have to train them to our expectations. I’m way too busy to deal with any of that, and your people are great to work with.

Candy: I know this is an extreme ask. But neither of us can ignore the realities of the situation.

Polly: Let me see what I can do.

Candy: I’ll send you over an amended agreement this afternoon.

Polly: Thank you.

 

Scene 3: TBD

 

Now go forth.

 

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Phil Harwood

Phil Harwood is a Senior Advisor with Tamarisk Business Advisors. Contact him at phil.harwood@tamariskadvisors.com.

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