Ah, money. The uncomfortable topic that everyone avoids like the plague in our relationships, at work, with friends. Pretty much anywhere, really. Many businesses have had to make pricing changes and/or increases these past few months with the skyrocketing economy. Aside from this, there are other reasons that your business may have to raise pricing, such as vendor/subscription price hikes and increasing service demands to name a few. So, we thought we’d chat about the do’s and don’ts of doing this. Let’s start with the things that you should do when changing pricing.
Do’s of Price Changing:
1. Communicate early. The earlier the better. A general rule of thumb is roughly one month before the increase begins. They will be glad that they can take advantage of the current prices before it goes up.
2. Stalk the competition and emphasize your value. What are your competitors charging? Make sure that your rates are comparable. Show customers why your product or service is more valuable. Providing check ins to see how things are going will help you stay on top of how you’re doing. Keeping an open line of communication will not only be appreciated, it will be easier to discuss price increases.
3. Be clear. Use facts and numbers. Discuss operations of the business and how they have had to change. Let them know that you are doing your best to minimize the need for pricing increases. Being transparent here ensures your customers’ trust stays intact. Explaining the justification of the price increase to your customers is very important. And remember, the higher the price, the higher the quality.
Don’ts of Price Changing:
1. Send generic emails. Make sure to personalize your emails to each customer when increasing prices. Address each customer by name. Small businesses can even notify by phone.
2. Not offering additional options. You can add something to your product or service to make them feel more comfortable with the price increase. Another option is to offer discounts or bundle options to offset price increases. It’s also crucial to make sure to offer support for your customers when price increases happen. They will most likely have questions and will want them to be answered in an efficient and timely manner.
3. Not notifying all staff. Aside from customer support, your entire staff should be fully briefed on price increases especially those that have face to face contact with customers. If there is any confusion surrounding money, you risk losing customers to the competition.
These are some very important things to do and to avoid when raising pricing within your business. With this knowledge you now have the structure breakdown to announce it to your audience. First, announce the price increase in a timely manner and provide a clear context as to why it is happening. Second, you must emphasize your value and thank them for choosing you. A grateful mindset creates abundance and your consumers will remember this appreciation for their business. Lastly, make sure to offer those additional options and customer support for their follow up questions and/or concerns. Communication is key for any successful relationship. Keeping it open with your audience will keep that relationship striving throughout their lifetime as a loyal customer.
