Rolling up Prices

“The price went up,” the female cashier stately coldly.   The woman paying for her breakfast rolls in front of me threw $2 at her.   “Way to treat us in a down economy,” she yelled before storming out of the building.   “I don’t make the prices, I just work here,” the cashier responded.   It was that level of indifference that caused me to throw down my $2, too. After all, the price had just gone up from $1.38 to $1.58 a few months ago and now Au Bon Pain was charging me an extra 42 cents a day.   Everyone understands the economy is bad, but if a business decides it must raise prices, it could express some regret and sympathy in a “Dear Valued Customer” note or at the very least instruct its customer-facing employees to alert the patrons about the increase instead of just ringing them up at a higher price and staring at them without a word, as if trying to pull one over on them.     The experience forced me to write an angry email to Au Bon Pain, whose Wall Street area manager surprisingly called me that afternoon to offer his apologies.   He explained that vendors were adding fuel charges and the cost of butter was rising, so the French bakery café—whose products are hardly fat free—was taking a hit. He had attempted to reduce the amount of butter from 24 percent to 22 percent in one popular croissant, but the quality suffered, so he chose not to go that route.   I felt too bad to mention that my rolls don’t contain butter as far as I knew, but I did point out that they now cost nearly 30 percent more than they did yesterday.   Apparently, I wasn’t the only one to do the math as the manager said he was accosted by two people in another area store who were yelling the percentages at him.   I believe part of the reason why I received a callback was the fact that my letter noted that there are countless breakfast alternatives in spitting distance of Au Bon Pain and if the angry woman in front of me and I both stopped frequenting the shop, it would lose $4 a day, $20 a week, $80 a month. While that may not seem like a lot of bread, multiply that by other angry customers and the near-term savings to the company could quickly turn into a financial smackdown.   Technology vendors and accounting firms can learn something from this. Nearly all of the 13 vendors we surveyed for the 2008 tax software issue of Accounting Technology ( www.webcpa.com/article.cfm)  upped the price of their products, with the largest climb going to Intuit’s ProSeries at 18.2 percent. But Drake Software hasn’t increased prices in 17 years, which executives say is a reason customers convert to Drake after their vendor raises the prices three or four years in a row.   While clients aren’t as likely to stomp out the door to the nearest firm if their accountant raises fees, they may follow suit of those accountants who switch software vendors if the increases continue to occur or don’t seem justified.   Firms that are currently evaluating whether it will hurt them to raise fees should also consider the best way to tell their clients about it.   Even an impersonal “Dear Valued Client” letter shows more respect than handing them a bill and hoping they don’t protest the increase or throw their shoebox at their preparer.