{
  "id": 5328230,
  "title": "Is there a ‘right’ way for a company to justify a price hike?",
  "url": "https://urgent.news/2026/09/03/is-there-a-right-way-for-a-company-to-justify-a-price-hike",
  "topic": "science",
  "section": "Science",
  "published": "2026-09-03T12:13:02.000Z",
  "source": {
    "name": "The Conversation",
    "slug": "the-conversation",
    "url": "https://theconversation.com/is-there-a-right-way-for-a-company-to-justify-a-price-hike-287843"
  },
  "original_language": "en",
  "account": "In today's economic climate, businesses are grappling with the challenge of justifying price hikes amidst rising inflation and consumer skepticism. A recent study by two marketing scholars suggests that a \"market-based\" justification, emphasizing supply and demand and scarcity, is the most effective in preventing customer churn. This approach, which focuses on factors like limited competition and high demand, was found to be 30% more successful in retaining customers compared to cost-based or quality-based justifications.\n\nThe study involved partnering with a Canadian self-storage company that randomly assigned different price-hike justifications to customers. When customers were told the price increase was due to higher costs or better quality, churn rates remained unchanged. However, the market-based rationale led to a 30% decrease in customer turnover, despite customers still viewing it as unfair. This is because it creates a perception of scarcity, making consumers believe switching would be more difficult and time-consuming, outweighing any feelings of unfairness.\n\nThe authors note that cost-based and quality-based justifications may no longer be perceived as fair in times of prolonged inflation. Consumers are becoming more price-sensitive and less willing to pay a premium for added features. At the same time, they still want to avoid the hassle of searching for alternatives. For businesses facing squeezed margins, understanding this market-based approach could be crucial in retaining customers during tough economic times.",
  "summary": "Shoppers are increasingly hunting for value, which puts the onus on businesses to tread carefully when justifying price hikes.",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}