How you can put your prices up without losing customers
February 18, 2013
'Let me just consider your price rise for a second ......... '
There comes the day when you realise that your expertise and experience is worth far more than you are currently charging. Or perhaps you’ve absorbed so many increased costs in a bid to remain competitive that your profit margin has diminished to the point where you have to increase your prices to stay in business.
The decision to increase your prices is usually met with anxiety.
How will your existing customers react?
They have become accustomed to paying you a certain amount, have budgeted for your services or products and suddenly they’re faced with paying more.
Here are 4 tried and tested ways you can manage a price increase and hold onto most of your customers.
- Instead of immediately imposing a price increase on customers, let them know you’ll be increasing your prices a little further down the line so it gives them time to adjust to your news. People rarely respond well to negative news being sprung on them.
- If possible, don’t charge the full price increase to your existing customers. Let them know that new customers will face the full increase, and tell them what this will be to reassure them that because of their loyalty they’ll still be getting a preferential rate.
- Let your customers know of the additional things you do, and will continue to do, but don’t charge for. Don’t assume that customers are aware of all of your nice touches.
- Sniff out your competitors’ charges. If you’re still price competitive after an increase you can be confident that if some clients do talk to competitors, they will most likely stay with you.
Of course, no matter how sensitively you handle the news of your price increase, you may still lose some customers especially those for whom price is everything. Accept this. You can’t please everyone!
Perhaps the best advice I can share with you is to charge a fair price in the first place. If you started your business charging a rock bottom price, although it may have suited you at the time in bringing customers to your door, it doesn’t take long for you to become resentful that you’re delivering so much for so little – and as a knee jerk consequence you hike your prices, alienating many of your customers, surprised at the suddenness of the increase.
So stand in the shoes of your customers and handle the price increase process with care and sensitivity.