Is Beyonce in town? Or why is everything so expensive?!
Beyflation – a noun
As it would be defined by Urban Dictionary:
The economic impact of Beyonce coming to town. Prices are driven up because people are all traveling from nearby cities to see this very popular pop music performer. The price of hotels, AirBnB’s, ubers, and other travel related items increase substantially – sometimes to a ridiculous degree.
In a sentence: “Why can’t I get a rental car when I arrive in Minneapolis?”
“Well it looks like Beyonce is in town Thursday, and we’re experiencing some heavy Bey-flation (or Baeflation).”
Similar to: Swiftonomics
What can we learn from “Beyflation” for our small business?
Local small businesses fail to raise their prices when demand increases beyond what they can properly service.
This can lead to lower end experiences for customers paying full price, and them waiting 6 months or more to have the service completed:
- Instead: Consider raising your prices to get the wait time down.
- Yes – more people will say no, but that’s ok.
- In the end – you’ll end up doing less work, for more premium customers that actually want to pay for value.
When is it appropriate to raise our prices?
Beyonce being in town – allows travel-related services to raise prices.
That being said – there are drawbacks to raising prices, and can lead to bad reputational problems if it’s done arbitrarily for most small businesses.
Here are a few reasons you definitely should raise your prices:
Increased costs: If your costs to provide the service (like materials, labor, overhead, etc.) have increased, you may need to increase prices to maintain your profit margin.
Improved service: If you’ve made significant improvements to the service you provide, your customers may be willing to pay more for the added value.
Higher demand: If demand for your service is consistently outstripping your ability to provide it, this might be an indicator that you could increase prices. This should be approached carefully though, to ensure it doesn’t alienate your existing customer base.
Economic changes: If the local economy or the economy of your industry is improving, customers might be willing to accept higher prices.
Increased experience or expertise: If you or your employees have gained significant experience or expertise that improves the service, this could justify a price increase.
Competitor pricing: If your prices are significantly below your competitors for a comparable service, it may be time to re-evaluate. Customers don’t just look at price but also the value they receive, so if your service is of similar or better quality, a price increase might be justified.
However, any decision to raise prices should be carefully considered. It’s crucial to communicate clearly with your customers about the change and to provide them with enough notice. If possible, explain the reasons for the price increase, whether it’s due to increased costs, improved service, or other factors. This can help customers understand the change and see the continued value in your service.
Also, consider the timing. If your business is seasonal, it might be best to implement the change during your off-season, so customers have time to adjust before your busiest time of year. If your business is more steady throughout the year, try to avoid raising prices during economically tough times for your customers, if possible.