Increasing Your Prices? Do These 5 Things

When it comes to business, the adage: the customer is always right could be true in some instances. However, when it comes to having to raise your prices, you’ll have to stand your ground, or risk letting your customers dictate what they will pay. If you are looking to up your prices and are worried about the customer push back, here are 5 things to consider from leading CEO professional development experts.

1. Anticipate the conversation. Some customers may want to know the reasoning behind why you are increasing your prices, but others may not. Either way, you want to anticipate the pushback and be ready to address the concerns that will arise. The more you can prepare your sales teams for the questions, the more smooth the transition it will be for all parties involved and your customers will feel like they are getting the clear information they deserve.
2. Provide ample notice. Expenses increase with time, that’s inevitable, but how you manage those expenses and any price changes that are needed as a result is a true reflection on the leadership of your organization. Generally, you want to provide at least 30 days written notice of any prices increases to all customers. This allows time for you to field questions or concerns and, if the price does influence whether customers use your service or buy your product, then this enables them to find appropriate alternatives as well.
3. Communicate your value. What is it that your customers love about your company? It could be the service you provide or the above and beyond mentality your employees have. Whatever your value proposition is, be sure this is clearly communicated when you announce the price change. Also tangibly explaining what additional value the increase in prices will enable you to do to better serve your customers is a great way to heed any objections that may be coming your way.
4. Be firm in your decision. Assuming you have invested time and research into determining the new price, then stand firm in seeing it through. You may have some customers object to the change, which is normal, however, if the business case justifies the change, then implement it and continue operating as usual. It is important to keep in mind that those customers that value your product or service will usually be open and understand the price change.
5. Review your offering. It is always good practice to do a self-audit of your products or services. What areas could you improve? What areas are you providing additional value that isn’t being used by the customer? There may be a few places where you can trim your processes to ensure that the increase in revenue from the price change is being reinvested into areas that will grow the business.

How have you handled increasing your prices? Is there a specific “formula” or strategy you use to reduce customer push back? We’d enjoy hearing your perspective. Share it with us on Facebook here.