Knicks tickets and World Cup seats are not accounting topics, at least not at first glance. But they can teach business owners something about pricing.
People complain about the cost, and then some of them pay anyway. Not because the price is reasonable. Because the experience feels rare, emotional and worth remembering.
That is something business owners should pay attention to.
At the low end of the market, customers may tolerate some friction because they know they are choosing the value option. At the very high end, customers may accept a much bigger price when the experience feels exceptional. The harder place to be is the middle: prices are going up, but the experience still feels ordinary.
World Cup ticket prices have drawn public criticism, with AP reporting prices from about $140 to nearly $33,000. Sports are an obvious example right now, but the same test shows up when a contractor sends a higher estimate, a restaurant changes menu prices or a professional firm raises its fees: at the new price, does the customer still feel the value?
Customers Are Watching More Closely
Business owners have real reasons to raise prices. Labor is more expensive. Fuel is unpredictable. Insurance, rent, technology, materials and borrowing costs are not exactly helping.
Recent NFIB data reported by The Wall Street Journal showed that 36% of small-business owners raised average selling prices in May, the highest level since March 2023. Another 34% planned to raise prices, the highest level since July 2022.
A price increase may be what keeps a business healthy. Many businesses underprice their work for years and train customers to expect too much for too little.
Remember though, customers do not see the cost pressures behind your pricing decisions. They see the invoice, the proposal, the menu, the service fee or the renewal notice. A slow response that might have been overlooked at the old price tends to stand out more once the price goes up.
Rising costs may explain the increase. They do not sell it.
Fine Gets Expensive Fast
When a business is the low-cost option, customers often build in some patience. They may wait a little longer, accept a simpler process or overlook a rough edge because the price matches the experience.
Once prices move up, that patience gets thinner.
Customers may have no real complaint: the work gets done, the product performs as expected and the service is adequate. At a higher price, though, “fine” starts to feel like a weak bargain.
That does not mean every business needs to become a luxury brand. Most customers are not looking for champagne and a red carpet. They want the basics handled so well that they do not have to keep thinking about them.
Answer the phone, explain the bill, set expectations and follow up when you said you would. Fix mistakes without making the customer beg. Make the handoff clean. Make the next step obvious.
None of that is glamorous, but all of it matters more when prices rise.
Being Memorable Can Mean Being Forgettable
A price increase feels different when the customer can point to fewer headaches.
Look for the places where customers have to work too hard: the confusing estimate, the long wait for an answer, the repeated question, the surprise on the bill.
Forrester research reported by The Wall Street Journal found that U.S. customer experience scores had fallen for three straight years, with consumers increasingly skeptical of the value they receive at higher prices. Once customers are already skeptical about value, confusion, delays and weak service cost more than they used to.
Price Is Also a Promise
Before raising prices across the board, run both sides of the decision: the margin you need and the experience the customer will judge.The margin may justify the increase, but the customer experience has to back it up.
If your costs are pushing prices higher, we can help you look at the margin, the cash flow, and the operating decisions that need to support the new price.