04/ 02/ 2007
by Shannon McRae
Pamela Cook of PF Cook Brick Company has no control over rising fuel costs that drive up the price of bricks and force her to pass on the increases to customers. But her creative ways of helping them handle the hikes keep her customer base steady.
Pamela Cook hates sharing bad news. But in recent years, the owner of PF Cook Brick Company has been forced to advise customers of substantial price hikes at least twice a year. Like so many other industries, brick manufacturers have been hit with the rising costs of natural gas and diesel fuel. Unable to absorb the higher prices handed down from her suppliers, Cook has had no choice but to raise prices herself.
"Although we'd like to be able to absorb the increases for our customers, we can't because of the lower profit margins already dictated by our area and the increased costs of local fuel that it takes to get bricks from our yard to the job sites," says Cook, who founded the business located just outside of Pittsburgh 12 years ago.
Even though her prices keep going up, Cook's customer base never falters. "We don't know of any customers we've lost because of price increases," she says. Her ongoing commitment to maintaining open communication and good relationships with clients keeps any walls from being built between them.
Customers appreciate that Cook doesn't accept the increases from her suppliers without asking why. Considering herself an advocate for her customers, Cook calls suppliers to get the exact reason behind every increase. "Some actually expect my call before the ink is dry on their updated price lists!" she says.
She also explains how the rising costs will affect her customers. "Sometimes manufacturers have to be reminded about how hard it is for the end user to absorb the heavy increases in prices." Though her arguments have never resulted in lower prices, Cook knows her determination doesn't go unnoticed--especially by her customers.
"I have the philosophy that if you are committed to your customers' success, then your own success will surely follow," she says.
Still, the end results of price hikes have real financial effects on Cook's customers. Most appreciate her position, but it's the service she and her eight employees provide after the bad news of the latest increase that wins them repeat business.
"The first thing we do is really listen to what they need," Cook says. Solving their problems usually means creative solutions, such as offering to have brick delivered directly to the customer on a flatbed truck. While it costs them time and labor to unload, it is less expensive than having it delivered by Cook. Other times, she can track down a more affordable brick that looks similar to the more expensive product a customer may have chosen initially.
With uncertainty in fuel costs, Cook expects the increases to continue. While she has no control over when the hikes happen, she feels confident that her company will always be able to handle them. "During my 30 years in the brick business, I've found the Golden Rule really does apply in day-to-day business," she says. "I feel privileged that my customers trust my company--I make it a point not to let them down."
Building Your Case
Follow Pamela Cook's tips to keep customers on your side if you have to deliver the bad news of a price hike:
Explain the reason. If you're passing on price increases from suppliers, follow Cook's lead and ask the suppliers to give you specific reasons for their hike. If you simply need to raise prices to cover rising expenses, be honest with customers and give details about how your operating costs have changed. The more you share, the less customers will think you're just padding your pockets.
Communicate quickly. Cook sends faxes to customers as soon as she learns about a manufacturer's new prices. "You never know when a customer may be preparing a bid, and you don't want to give them any surprises up ahead," she says. Depending on your customer base, consider personal letters, e-mails or even phone calls to share the news. Always invite questions--and be ready to answer them.
Offer alternatives. Don't relay the bad news and then leave customers wondering how they'll handle the price increase. Develop solutions and alternatives that will help them tweak their plans with the new pricing.
Provide personalized service. No two customers are alike. Work with employees to come up with solutions for all your clients. While it might be faster to deliver the news in a generic message to all your customers, follow up with ideas customized for their needs.
NFIB.com
If setting prices is a challenge for you, find more tips in "Pricing" in the "Sales and Marketing" section of www.NFIB.com/toolsandtips.
