18 Dec How to Raise Prices Without Losing Your Customers?
Before you even opened your business, you already studied well and hard on how you should price your products in a way that consumers will accept it but, at the same time, give you room for profit.
It takes a lot of time to build up a good name for the business and to get people to embrace your product.
However, time will come when you will have to make changes that will have to be absorbed by the loyal customers, and the biggest of that is raising the prices of your goods.
This will be a hard and difficult transition as you have to once more entice your consumers to patronize your product despite a higher price range.
This is one hard truth in business and something you have to deal with.
Inflation can be caused by many things. Gas prices always dictate the rise of all prices as this also leads to the increase of raw material needed to process your products. These are things that we have no control over and this our businesses should be able to adapt in order to survive.
It wouldn’t have mattered if you are selling a basic commodity like bread or milk or eggs, because people will still buy them because they need it to survive.
But if you are selling goods that are you need to be strategic so that you will not send your customers packing.
What are these strategies that you can use to implement price increase honestly and effectively while still get the support of your loyal customers?
1. Communicate this well to your consumers
Be honest to the people who will be giving you business–your customers.
You have to be transparent that you are increasing your prices and you can use the social media platform to make this announcement.
You can explain to them the reason why this is happening in a carefully worded post or email.
Catching the off-guard with the new rates might make them feel betrayed and that would lead you losing a good customer base.
Let them know that after many years of nothing but the best service at the lowest possible price, however, the current economic situation pushed the company’s backs against the wall and the company has to increase the prices. However, assure them that they will still be enjoying the same quality of service and products from your company.
2. Timing is everything
When you feel that you have reached a point when the customers have gotten used to it, or once you have explained to them about the changes, it will be easier for them to accept it and support you still. Make them feel that they will still be enjoying the best quality and service that you could offer.
Remember: raise prices when you are at your peak, not when you are still struggling to get your footing to create your niche in the business. It is a bad idea as well to raise prices when you are experiencing a bad PR nightmare.
An example for this is when you just recently had to make a damage control after getting a bad review online. The remedy to a bad PR is not to increase your prices because that will be another PR tragedy waiting to blow up in your face.
3. Increase price, increase quality of service
If there is a looming price increase about to take place, make sure that the customer’s experience will be upped to another level as well. It could be in the form of a better service.
Like if you are in the food business, you could serve food at a faster rate; or you will have more personnel greeting your patrons at the door to create a more positive atmosphere for shoppers; or staff being more attentive to your customers.
If you are in the business of selling home appliances, or electronic gadgets, you may give them an extension of the service warranty.
This way, you do not spend more on freebies. Improving your customer service will be appreciated by loyal customers. They will feel more welcomed and they will be more forgiving about your price increase.
4. Give special privileges to loyal customers
Companies like telephone networks or cable companies that are on the brink of a price hike may give a special consideration to customers who have stuck with them from the start.
Should they need to increase the rate of their services by a certain amount, make sure that your sales representative will explain to them thoroughly the reason for the price increase before surprising them with a loyalty reward. As loyal customers, they will still enjoy the old rates for a few months before the new rates will take effect for their accounts.
Knowing that you recognize their loyalty will make them more understanding of the new prices. And that also gives them a few months to mentally be prepared of the new price increase.
5. Offer an option as transition
If it is too hard to increase the prices of your products, you may introduce a new and improved product based on the original.
Later on, you may discard the original and you will now be selling the better version product at a higher price.
6. Sneaky but worth a try
In the food business, it is common practice, that If the need to increase prices arise, it is sometimes difficult.
What they do is cut on portions or maybe eliminate a side dish, or slice off a small portion of a candy bar so that they do not have burden the consumers with the additional cost.
Fair warning: although it’s a workable idea, this however, is tricky and if your consumers find out, it might backfire on you.
In times of economic crunch, companies do not have a choice but to also increase the prices. But being in any kind of industry, always make sure that customers satisfaction will be on top of your priorities. After all, they are the ones who will be bringing you business and money, at the end of day.