December 15, 2022

Price Point Resistance

In an inflationary environment, your newer customers are more tolerant of higher prices than are your long-time customers. Here's an example from recent work:

  • $36.29 average price point for customers acquired 49+ months ago.
  • $38.58 average price point for customers acquired 37-48 months ago.
  • $39.19 average price point for customers acquired 25-36 months ago.
  • $39.09 average price point for customers acquired 13-24 months ago.
  • $42.10 average price point for customers acquired 0-12 months ago.
This brand generates 40% of sales from customers acquired 49+ months ago. That's a problem for this brand, because this brand is trying hard to increase prices to cover cost of goods sold increases ... but the long-term customer base is balking at price increases.

If 15% of your sales come from customers acquired 49+ months ago, it will be easier to pass along higher prices to customers.

It's common to observe price resistance among long-term customers.

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