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Are you losing sales because of price increase in material and labor? Do you feel overwhelmed by the constant price increases? Are your stimulus plans at risk?
Check out these 11 tips for increasing your prices without losing customers:
Don't try to hide your price increases. Honesty is key to maintaining relationships, so explain to your customers that you are raising your prices. Be honest with your reasons and be as clear as possible to help them understand.
For instance, as some raw materials become increasingly scarce and expensive, companies that utilize these materials are forced to increase the prices for products that use them.
Explaining this to your customers will prove your willingness to be transparent.
The first thing to do is to say thank you to your customers. Express your appreciation for the risk they took on you and make sure they understand why you're asking for more money and why your product is worth more now than when they started.
Be empathetic about the effect they may have on your clients. The difference between great customer service and satisfactory customer is having representatives who continuously go the extra mile to deliver a positive brand experience.
Let customers focus on value by giving them a second, lesser-priced option. Then there's a decision to be made, which focuses on the value that the product sets rather than the price increase.
For example, you may offer a thinner magnetic product to your customer to offset the price increase. They might prefer a stronger and sturdier magnet and be willing to pay a little more. Or instead of offering a full magnetic item, why don't you consider adding the value of magnet with a single magnetic strip?
If you have time before announcing your price increase, over-deliver and really impress your clients. That way when it comes to communicating this increase, your clients will be much more willing to pay more as the value you're been provinding them will be fresh in their minds.
Be sure you can demonstrate that the value you provide is increasing more than the price. It's something to increase pricing, but if you cannot deliver the goods, your customers won't see the added value.
Something that has a greater value can be sold at a higher price. How can you do this? You could release a 'new line' of product that are essentially the same as your current line in terms of production costs, but with a superficial change in terms of appearance.
You could market your new line as 'premium'. What sets your premium apart from your regular line? Choose an added value as the focus of your new product line, and highlight it in your advertising.
If you can add services above and beyond the physical product you sell, you can add these costs in as premium prices. For example, you could add in the option of gift wrapping, a personalized card, or a warranty. These are services that are not related to the product itself but add value to the purchase.
Your product should always be improving, but it's simply counterintuitive for somebody to pay more for the same thing they got for less before. Justify the price increase by adding features of providing some other type of added value.
Customers are far more likely to accept higher prices if they're getting something extra in the bargain. Consider what you could throw in with your current product or service that would cost you little or nothing but would have higher perceived value to the customer.
It's essential that customers don't think that you're doing so just because you want a better profit margin.
You can avoid raising prices on your actual product or service by adding fees. This is a good strategy if you think your price increase will be temporary; you can easily remove the fee when the need for it is over.
As your business develops, your product should be worth more. Briefly explain how the higher price is going to allow you to better serve them. Then move on. If you're proven your worth, then they won't walk away.
Let your customer know well in advance. Remind them of the quality you provide. Justify the price increase. Make sure that your whole business is aware of the price increases. Ensure your customer can contract you for more details.
You can't keep all your customers happy, and when you raise prices, you're bound to upset some of them. Be prepared to explain why you're increasing prices (higher cost and/or better products and services), both in person and on social media if customers complain here.
Give customers a chance to buy a higher-tier plan before prices go up. You'll get a nice bump in revenue from these early upgrades, and your user base will be happy that they got a chance to buy before the price increase.
Plan ahead, before raising your prices, make sure you've considered not only your current costs but also any cost increases that are likely to happen in the next year or two. You don't want to go through a huge struggle to raise prices, only to find four months later you need to do it all over again.
If you need to raise prices drastically, you may need to go after a new, more affluent customer base.
Even if your price increase is modest, expanding your target market a bit to more upscale customers or businesses with bigger budgets can be a smart way to offset the customers you may lose.
The best time to raise prices is when you're sure customers are satisfied with your product or service. If you're planning a price increase, be especially diligent about proving your worth in the months before you do so.
If your business is service-based, such as a B2B company, lawn-care business or cleaning service, your customers expect price increases from time to time.
If it's justified, raise prices at the beginning of every year or after a customer has been with you for a year. If your services are provided on a month-to-month basis, offering a six-month or year-long contract at a lower cost than the month-to-month rate is a good way to lock in customers who want to avoid the price increase.
When you raise prices, you may lose very price-conscious customers. To keep some of them, raise your prices, but offer occasional discounts and deals that bring prices down to their original levels.
While frugal customers will use these discounts, less frugal customers probably won't bother, so you'll still get plenty of people paying full price, while keeping your bargain shoppers happy.
There is always a risk of losing a customer when we announce a price increase. But these tactics can make it as painless as possible for you and your customers.
If you're looking for a reliable solution we're here for you! ✅