Keeping your customers happy is easier said than done — especially when you tell them you’re going to increase your prices for your product or service. To be honest, no client will jump for joy at this news. But it is possible to soften the blow when you break it to them.
Choose the right time…
Any good golfer — or any bad one for that matter — will tell you that timing is everything. This skill is also handy when you decide to raise your rates. For example, choosing a time of least resistance is a smart move. You might want to introduce an increase while there’s peak demand for your product or service.
Your increase shouldn’t take effect immediately. Your customers will appreciate the opportunity to plan for your new pricing structure, so try to give them as much notice as possible. Allow them to place one or two more orders at the existing pricing — you could promote this as a special favour to a valued client.
Show your value
In between telling your customer about a price increase and actually implementing it, redouble your efforts to improve your offering. Be sure to promote those enhancements and the added benefits they offer.
By aligning your price increase with an increase in perceived value, you can persuade your customers to reevaluate the real worth of your product or service and (hopefully) make them see how invaluable it is — at any price.
As Justin Gray, CEO of LeadMD says:
“Customers will pay for something that has demonstrated value to others. Are you changing people’s lives and getting one rave review after another? If you are, then don’t rip yourself off. If you can show a viable business outcome as a result of your product or service then you are ahead of the vast majority of providers — price accordingly.”
Explain your changes
There are likely a number of reasons for increasing your prices. Whatever they are, they need to be clearly explained to your customers. Your clients have every right to know why they are being asked to pay more, and a failure to justify an increase might be seen as nothing more than a blatant way to grow your profits.
Whatever you do, don’t let your customers find out that prices have gone up from an invoice. Always tell them before an increase goes into effect, and tell them yourself.
However eloquent you might be when explaining your reasons for an increase, expect some backlash. Have a strategy in place to address concerns from customers who may be aggrieved. This is particularly important in the social media age where there’s no such thing as one-on-one correspondence. Millions of people might read your replies on platforms like Facebook. What an opportunity! Instead of just defending your price rise, it’s also your chance to sell the demonstrated value of your offering on a very public stage.
Opportunities keep on coming
Your price bump could cause you to lose customers, even if its just a modest increase. Here, though, you can create another opportunity for your business by expanding your target market to include bigger and more affluent customers. Businesses with larger budgets will easily offset any customers you lose.
Give them more than a price increase
If your customers feel they are getting something extra with the increase, it might seem a little less strenuous. What can you provide, at little or no cost to yourself, that will make them feel that way?
It might be faster, discounted, or free delivery. A longer warranty. A free ebook that imparts your expert knowledge. A product that arrives gift wrapped and ready to pass on to some lucky recipient. Put your thinking cap on and consider those little extras that can act as a big sweetener.
By the way, this is not our way of telling you that we’re about to change our prices. Convex Accounting has no plans to increase our charges — but if we ever do, we’ll be sure to follow the advice we’ve just given you.