Imagine for a moment that I, as a cafe owner, took a deep dive into our expenses and made the very informed decision to raise our menu prices by $2 per drink. From my perspective, analyzing the cost of goods, cost of labor, rent, pricing of our competitors, and our own quality advantage, this move makes perfect sense.
Suppose I do this, and my baristas notice multiple customers over the course of several days, coming in, cash in hand, taking a look at the menu and then walking out muttering that the prices were too expensive. Cash still in hand; coffee bought instead from the cafe down the street.
I of course don’t notice this because I’m too busy “leading” the company, so I go along my merry way, unaware that we’re losing business, and fast.
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