In this world, the only constant thing is change. And this applies to everything, including your prices.
But why does it seem like when it’s time to change prices, this reality somehow becomes a forgotten truth? Well, at least for your clients, it does.
It’s absolutely normal for your clients to feel a bit of resentment when your prices go up. However, raising your prices is simply unavoidable especially when:
- Your costs for doing business are steadily ballooning.
- You’re saying no to clients because you’re uber busy and super swamped, and to cope up…
- You need to hire great employees to help out, so you could say yes to clients again.
And you’re backed up against the wall. You just have to raise prices otherwise your business will be greatly affected. There’s no other way around it.
How do you announce a price increase to your customers without them resenting you for it? How do you do it without getting on your clients’ bad side?
1. Give ample time before you start rolling out new prices
Understandably, clients (especially your most loyal ones) would need to be told in advance if you intend to increase your prices. Never spring it up on clients.
Make sure that everyone is aware of it — so don’t be stingy on the notices. Put it up on your website, put it in newsletters, or hang it up on signages in your store.
If you’re increasing the price of your most popular and cheapest service or product, you can use the price increase countdown to get a revenue boost. Give your customers the opportunity to choose higher plans or more expensive options with more features before you raise your prices.
They’d be glad to be given the chance to weigh their options better and decide whether they’d go for an upgrade before the price increase happens.
2. Be grateful
Your clients always deserve your sincere gratitude. And it’s not a bad idea to include a genuine thank you message when you’re about to announce a price increase.
A well-written, sincere message would soften the blow for your customers. This would also help remind them just how awesome your company is when it comes to treating people.
You can start your price increase email or letter with:
“We are extremely grateful for your patronage. It’s always been our joy to be of service to you, and we want to continue doing so for the years to come.”
“Over the years, we at XYZ company have made customer satisfaction our daily goal. We are sincerely thankful for your trust in us and in the quality of our products.”
3. Don’t be afraid to share the reason for the price change.
It’s hard to argue with a simple, logical explanation. And sometimes, that’s simply what most level-headed customers need.
Share your story. Explain to your patrons the reason for price increase. Did materials for your products become more expensive? Is there an inflation across the board due to the local currency falling against the dollar?
You can say:
“We at XYZ understand that we’ve kept our clients happy with the quality of cups we provide. And to keep providing the same high quality, we would need to raise our prices to $1.50 each, as raw materials and service prices have been steadily increasing over the year.”
4. Haven’t raised prices for a long time? Remind clients of that.
If you’ve had prices at the current level for years, it’s a good idea to remind clients your clients about it.
You can say:
“For the past seven years, we at XYZ company have been serving our amazing clients with our trustworthy product. During the course of our doing business, we have not raised prices, despite service expense challenges. However, effective from July 1 this year, we would need to increase our prices by 5% across the board.”
“We have always made it a point to provide the best quality of can openers for our clients nationwide. We haven’t changed prices for the past five years, as we have always wanted you to make the most out of your hard-earned dollars.
And with the help of our amazing staff and crew, we’ll continue to do great work for you. But with raw materials becoming more and more expensive, we have no other option but to increase our prices to $8.99 effective from July 1 this year.”
5. Have patience and sometimes, special treatment, for big clients.
Be ready. Some of your big clients will object to the price increase like it’s the most offensive thing you’ve ever done as a company. And through the over-reactions, you must speak with clients patiently.
Some of these big clients will want to speak with a manager after speaking with an associate or an account manager regarding the price increase. Or if the client doesn’t request to speak with someone of a higher level, but you see your associate struggling in the conversation, you can send in your general manager or someone of a similar position to handle things and help your employee out. Be patient and understanding, but remember to be persistent about your stand.
6. Handle negative reactions empathetically
Yes, your price increase is backed up by sound reasoning, triple-checked computations, months of research and infallible data. This is why when your long-time clients air their disappointment with the price increase, you always go ahead and preach the factual spiel you’ve memorized since announcing the price change.
But should things always be done this way? Not necessarily.
But what you should be keeping in mind is that if your clients react emotionally, you should respond to it the same way. Inform them that you understand how they feel.
If you’ve already talked about the reasons behind the price change and your clients feel like you’re not listening to what they’re saying, apologize and work harder to communicate with them better and improve customer service. Win over your clients trust by being more understanding of where the frustration is coming from. When they feel that that’s established, only then will they start to hear your reasons out.
7. Remind your clients how awesome your services are
It’s always a good idea to mention the great benefits of sticking with your company. The consistently solid quality of your products. Your knowing of their account really well. Your number of years of service. Your amazing customer service.
Reminding your customers just how much you’ve been a great help to their lives or businesses will make them realize that a small price increase won’t be enough to leave you or your company.
8. Make your product or service even more kick-ass than it already is
So you already have a kick-ass product or solid service. Why not make it even better? By putting in an additional feature or service, you’re adding value to an already exceptional service. This will entice your customers to pay a higher price for your services more easily.
Or you can choose to go this route: you can also offer a different plan or service — one that asks for a smaller fee in exchange for lesser service. This way, your clients can choose whether to pay less for less or pay more for more.
9. Be Upfront
You have an obligation to your clients to always be transparent, especially if you treat your clients like they’re members of your family. Guiding your clients as to why there’s a need to raise prices and being truthful about it would be stellar. After all, 85% of clients tend to support brands that they consider, to be honest.
You can say:
“Despite every effort to put off raising prices for the last three years, I have no other alternative than to raise my hourly rate to $200. With this price increase, you are assured that the same level of service, if not better, will be rendered.”
“The price increase for the materials we use in creating beautiful and sturdy slippers have dramatically increased in the past year. Because of this, we have no other recourse but to raise our prices by 5%, so that we won’t be forced to compromise on our product.”
10. Wow them and be indispensable
If you’re simply too great of a company, a few additional dollars will not be a dealbreaker for your clients. What makes loyal customers is superb service, a great value for money, and stellar customer service. So consistently impress your clients on all these, and if you can, on more aspects of your business before you raise your prices.
But don’t stop making great things with your company after raising your prices. Demonstrate the great value your clients are getting by continuing with your services.