Does your industry have a clear pricing leader? That is, does one firm tend to make price moves and industry participants follow?
If you are lucky, your industry works this way. If you are a price leader you may already know the benefits of this role. You can set the pace for price increases in your industry or at least have a strong influence. You can also influence the amount of the increase by leading. Smart competitors that follow will take your lead both on the timing and the amount. There is a clear advantage, and an industry responsibility, to being the price leader.
If you are a price follower, you too have responsibility within the industry. For example, supporting the price leaders moves both in the amount and timeframe is important. Our pricing consultants have seen many cases where the leader increases prices and a follower fails to make a timely move. The key is being timely. We have seen many price leaders roll back price increases because followers were “asleep at the switch” and didn’t increase prices in a timely manner. Timely can mean announcing increases within a couple of weeks to a month.
Be aware of your competitors pricing moves. But, above all, don’t engage in any discussion with competitors on anything related to pricing. Price discussions among competitors in the U.S. are illegal.