Is there a ‘right’ way for a company to justify a price hike?

Marketing scholars studied how companies justify price increases to customers, testing three pitches: costs went up, quality went up, or — the winner — good luck finding it cheaper elsewhere. Working with a Canadian self-storage company, researchers found that customers told a scarcity-based story were 30% less likely to leave, while cost-based and quality-based justifications performed no better than offering no explanation at all.

The takeaway is blunt: shoppers have grown numb to companies blaming inflation, and they're skeptical of promises that price hikes come with better quality. What actually keeps people paying more is being told, essentially, that switching is a hassle and alternatives are thin on the ground.

The full dispatch is available from the source below.