Like any business, you’ll naturally want to raise your prices at some point. Whether this is to expand generally, to bring it in line with inflation or if you’re in a rough patch, customers will come to expect it. That doesn’t mean they like it very much.
Raising your prices is a delicate balance between getting what you need and keeping your customers happy. A huge increase may be what you need to keep your business afloat but if there are no customers left, it’ll have the opposite effect to what you want.
Here are some ways to increase your prices in a way that won’t drive away all your customers:
There’s no point hoping your customers won’t notice. If you’re providing a service, you should inform your clients that the costs will be higher so they can feature it into their budgets. This is better done sooner rather than later to give them time to prepare or make alternative arrangements.
However, you may not have to formally tell customers if you have a shop or something similar where the price is clear for customers at first glance.
Rather than bumping up your prices 20% and watching all your customers run away, try doing this gradually over the space of months or even years. Everyone is already used to businesses gradually raising their prices. While they may grumble about it, they won’t necessarily stop paying as long as the increase is reasonable and manageable.
Have a script
Whether you inform clients via phone or email, it helps to have a pre-agreed script or template you can use to explain that the prices have increased and why.
If clients contact you to complain, it helps to have a script to keep the message consistent and also to offer something to ease their troubles in the event that they’re not happy. For example, a temporary discount or free gift might help to win them over.
Increase your value not just your price
People won’t complain so much if they feel that they’re getting more for their money. So while you work out pricing structures, try to think of how you can increase the value of your services to match the new price.
Sell things as bundles
You may be able to increase the value of your products or services if they are bundled together. You can still increase the prices but if customers see they’re getting more for their money, they may overlook the increase and be happy to pay it.
This may seem counter productive. However, when announcing your price increase, you could give customers a few weeks or months at a lower rate in good faith before the increase. This may help to keep them on board and prevent knee-jerk reactions like moving to another company.
Are you thinking of increasing your prices? How are you planning to approach the topic with your clients? Let us know your thoughts.