20/03/2025
I’m a caffeine addict, and my daily coffee fix is non-negotiable.
I used to patronize this small coffee stall in Tanjong Pagar and there was always a queue of at least 6 person in front of me every morning.
But last September, the stall raised its price from $1.50 to $2.20, touting a reusable “better” disposable cup as the reason.
The result? The queue disappeared—and so did I, choosing the stall opposite instead.
Why would I want to keep 5 disposable cups every week. Soon, I would have a mountain of cups filling up my cupboards. So, this “added value” is worthless to me.
I’m ALL for price increase for businesses. It’s the easiest and most impactful way to increase profits.
So, kudos to this stall for daring to do it. But, there are better ways of doing it.
Businesses fear losing customers when they raise prices, but the real question is:
how many customers can you afford to lose, and will the extra profit offset it? Will it be a net gain or lost?
Just increasing price alone won’t work well. Always seek to add value and there must be a perceived increase in value felt by your consumer for that extra charge.
Price hikes need thoughtfulness and there are clever strategies to present value in a way that resonates with consumers.
At the end of the day, customers decide if your added value justifies the extra cost.
There’s only one way to find out —test it.