Price increases are a huge sore spot for customers. The number one problem with price increases is their validity. With each price increase, how do you confirm whether or not it is in compliance with the agreement? This is one of the most challenging aspects of a uniform rental program. How do you determine effective rate of change across items? Across the invoice? With changing inventories? There are many different variables that contribute to your extended amount, and trying to understand their interdependencies can be confusing. Ultimately, it leads to a masking effect of the effective rate of increase.
Most customers, unfortunately, don’t have the time or tools to unmask the variables to see what their price increase actually means. More importantly, they don’t know when they can REJECT an increase in accordance with their agreement. That’s right – customers can reject a price increase if their provider is in non-compliance. First, however, you need the data to give you that information. Here again is another obstacle – in order to check for price compliance, you’d need to look at the trend of all your pricing, across all your invoices. Do you have time for that?
In addition to the problem of the masking effect, there is the compounding effect. For example, if your agreement stipulates a 5% increase per year, but the actual, effective rate of increase per year (because of off-cycle increases) is 8%, then you get caught in an exponential rate increase trend that becomes increasingly hard to detect. In this example, you would expect your cost to have increased by 21% after four years – but it is more likely that it would have increased 36%!
Unirithm uses a normalizing technique that creates clear and definitive benchmarks for each item and each rate. Even if you have mixed billing methods and multi-day delivery schedules that create scenario-driven rates, our models can handle it. We bring clarity to price increases and give you the information you need to make better decisions. Why accept a price increase if you don’t have to?