Market‑Based Justifications Cut Customer Churn in Price Hikes, Study Finds

A recent study with a Canadian self‑storage company shows that when firms explain price increases as a result of higher demand and limited competition, customers are 30 % less likely to leave than when cost‑based or quality‑based reasons are used. The research, published by marketing scholars, involved randomly assigning customers to receive one of three justifications. Those given a market‑based rationale retained more units, while cost‑based and quality‑based explanations produced churn rates similar to no explanation at all. The findings suggest that in an inflationary environment, highlighting scarcity can outweigh perceived unfairness and help firms maintain revenue without losing customers.