How To, and How NOT To Raise Prices (While Minimizing Customer Loss)
During times of inflation, companies may find it necessary to increase their prices. However, there are steps you can take to minimize customer loss when increasing prices. Here are some thoughts to keep in mind.
Proactively Notify Customers
If you think you can quietly slip a price increase past your customers, you may find them quietly slipping away. Your customers will notice and may even take offense to you for not being upfront about the increase. You are far better off being open about any price increases you feel forced to make.
Explain the Increase
Your customers will likely respect your transparency involving any price increase. Let them know as specifically as possible about why you have to implement a price increase. Be sure to include steps taken to keep prices low and how important maintaining quality is to your business.
Try to Notify Customers in Advance
If you can, let customers know as far in advance as possible about an anticipated price increase. Customers don’t like negative surprises. They certainly don’t like feeling trapped in a price increase without warning.
Offer Options
If possible, offer your customers “light” or trimmed-down options for your products and services. You may also be able to give them payment options to improve your cash flow while minimizing price changes. Perhaps you could offer a price freeze for a successful referral. Consider options like cash discounts, bulk pricing discounts and other ways to help ease the pain of a price increase.
Increasing prices can be necessary but a bit scary. The key is being upfront about the reality of inflation.
Is your business insurance keeping up with the growth of your company? Our independent business insurance specialists are qualified to review business insurance policies from any company. A business insurance review can take less time than you think, and coverage may be less expensive than you may expect. Contact us today for a no-obligation review and price quote. We look forward to assisting you.
