By now every retailer should have been notified that carpet prices are on the rise. Just about every broadloom manufacturer is participating in the 5% to 8% hike that takes effect in early to mid October.

Reasons cited for the higher prices are the same old story: Increases in raw material prices, particularly those in the manufacture of backings, have necessitated the move. The mills say they cannot afford to keep absorbing the increases and must pass them on. They advise you do the same to your consumers.

I know what you’re saying: “How can I even think about raising prices in this economy? The last thing I want to do is price out my customers.” Bad premise. The one thing that prevents many retailers from raising their prices is fear, and the three biggest fears about raising prices are:

1. “If I raise my prices, I would be ripping off my customers.”

Do you provide a value to people’s lives? Do the flooring products—in all categories— you offer make their lives better? Focusing on price is a mistake. Instead, you should focus on the value flooring provides to your customers. You are not selling her just a piece of carpet; you are helping her make the environment in which she lives more beautiful and comfortable— a place she’ll be proud to show off to family and friends. A price strategy works only if you have nothing else to offer.

2. “My customers can’t afford to pay more.”

Research shows people will pay for things they want and consider valuable. People are willing to pay for products that solve their problems. In some cases you could offer that piece of carpet for free and the customer still wouldn’t take it. Why? Because it may not be the right solution to her problem.

3. “If I raise my prices, my customers will shop elsewhere.”

The truth is you could lose customers even if you do nothing. If you cannot give your customers a reason why you are different, then they will only judge you on price. What happened the last time you opened the Yellow Pages and thought all the ads looked alike?

When you don’t give customers a reason why you are different, they will reduce you to a price. Offer something that is unlike your competitors. This difference may be quality, service, delivery, speed, etc. When the distinction is important to the customers, they will pay your prices.

I was reading an article the other day that discussed successful price strategy principles. Thousands of small business owners have tested the following four principles and found them to be extremely successful:

1. Having the lowest price is a no-win marketing strategy. Unless you are as big as Wal-Mart, within a short period of time, someone will find a way to offer a lower price for your product. And being big is no guarantee either. Sears was replaced by K-Mart, which was replaced by Wal-Mart as the low price leader. This is the law of business.

2. When demand exceeds supply, prices go up. Anything you can do to contribute to this economic law will support your price increase.

3. Instead of focusing on price, focus on improving the value to the customer—and then raise your prices.

4. People pay for expertise. How can you educate them to see your competence? Look at the recent price increases not as a negative, but as an opportunity.