It happens to us all at some time or other; you realise that your expertise and experience is worth far more than the prices you're charging. Or maybe you’ve absorbed so many increased costs in order to stay competitive that your profit margin has diminished.
It's time to raise your prices if you want to stay in business.
But the decision to increase your prices can cause a great deal of stress. How will your existing customers react? They have become accustomed to paying a particular fee, they've budgeted for your services or products and now they’re faced with paying more.
Here are four tried and tested ways to handle a price increase without losing many customers.
- Instead of immediately imposing a price increase on your customers, let them know you’ll be increasing your prices a little further down the line so it gives them time to adjust to the news.
- If possible, don’t charge the full price increase to your existing customers. Let them know that new customers will be paying the full whack, even going so far as to tell them what this will be to reassure them that, because of their loyalty, they’ll be getting a preferential rate.
- Let your customers know about the additional things you do now and that you will continue to do, that you don’t charge for. Don’t assume that your customers are aware of all of the extras you provide.
- Check out your competitors’ charges. If you’re still price competitive after an increase you can be confident that if some clients do talk to competitors, they will most likely come back to you.
Of course, no matter how sensitively you handle the news of your price increase, you may still lose some customers - especially those for whom price is everything. Accept this - you can’t please everyone!
Perhaps the best advice I can share with you is to charge a fair price in the first place. If you start off charging a rock bottom price to bring customers through the door, it won’t be long before you become resentful that you’re delivering so much for so little. Trying to remedy this situation by dramatically putting up your prices will just alienate your customer base.
Copyright © 2015 Dee Blick, Fellow of The Chartered Institute of Marketing and an Amazon #1 bestselling author of The Ultimate Small Business Marketing Book and The 15 Essential Marketing Masterclasses for your Small Business.
Related articles and resources
You may find the following articles and resources useful:
- I need to raise prices but fear I’ll lose sales
- Competing on price? Ten steps to success
- Winning the sale without dropping the price