How to Raise Prices Without Losing Customers
It happens to any business that after a while wants to increase the price of its services and products. This can happen for various reasons such as increasing the cost of raw materials, increasing the quality of services and products provided, and so on. Naturally, as a business owner, you do not want price increases to cause you to lose customers. In this article, we will provide you with strategies so that you can increase prices without worrying about reducing the number of your customers.
Explain honestly the reason for the price increase
One of the most important strategies in increasing the price of services and products is to clearly define the reason for your work. To justify the price, try to connect with your customers, provide stronger after-sales service and advice. In conversations with your customers, explain to them that the price increase is precisely because of the quality website traffic of the service provided to them or the increase in service.
Make sure you get your customers’ satisfaction, if your customers are justified and accept your arguments, when they talk to someone else about you, indirectly defend your brand and give them a reason to increase Explain the price.
The sales team and the service team play a key role in raising prices. You need to explain to them that they may receive negative feedback from customers, but they need to be patient with them and explain why.
Gradually raise prices
Another strategy to increase prices is not to raise prices suddenly. A sudden and excessive increase causes customers to distrust your brand and products. The important thing in raising prices is, are you really looking for more profit or is customer satisfaction a priority for you? If you really need to increase the price, raise it in line with inflation and in a standard and principled way.
Use long-term services
If you take a look at the marketing and sales strategies of reputable and successful brands and companies, you will find that most of them use specific guidelines. If you are a service provider, you can act like Amazon to succeed in your pricing strategy. How? Amazon offers special discounts on membership fees to customers who extend their membership until June, but the membership fee is about double for those who postpone it until after June. So instead of increasing the price, you can offer longer services at a lower price to your customers.
Apply price increases on services and by-products
Other strategies to increase prices include changing the prices of products and ancillary services. Imagine that your company and brand has reached a stage where they need to change their prices, but your consultants warn that now is not the time to raise prices! What is the solution in this situation?
For example, imagine that you are a manufacturer of computer games, and in addition to that, you provide them with additional services such as chatting with teammates or competitors, more features in the game, different themes, and so on. If the ancillary services you provide are attractive enough, raising minor prices on them can be a successful price increase strategy and make it easier for customers to interact with it.
Choose The Right Time To Increase The Price
Another important point in a successful price increase strategy is that you choose the right time to increase the price. Naturally, when for any reason your negative feedback is high, it is not a good time to raise prices. Conversely, once you have achieved your customers’ satisfaction, the price increase can be met with positive feedback.
Inform Your Customers In Advance
Imagine that your customers receive services from you on a monthly or annual basis and pay a membership fee at the beginning of each year or each month. It is not fair that their bills increase suddenly and unknowingly without them being willing to pay. In order for the price increase not to have a negative effect on the customer, be sure to inform them before applying the price increase so that they can plan for their monthly financial payments and divide their budget.
Inform The Entire Organization And Company Before Applying The Price Increase
Imagine that you are a worker, designer or engineer of an industrial unit and when you buy the product of your company and organization, you realize that its price has gone up! Or when your friends ask you questions about the reason for the price increase, do not be aware of it at all! This has a negative effect on both your employees and your customers. Therefore, before applying the price increase, inform all your staff and personnel about the amount of the price increase and the reasons for it, so that you can give them a sense of confidence and value, and they can be your spokesperson against customers’ questions and protests.
Also Check Your Competitors’ Price Increases
If the reason for the price increase is the decrease in raw materials or the increase in their prices, you and your competitors will probably have to raise the prices of your products and services at the same time or over a period of time. In this case, try to check the price increase of your competitors and you do not have the highest percentage increase in price. If you can get the least price increase without losing quality, your customer feedback will probably be more positive.
Evaluate Your Business Position Among Customers
Another important strategy for success in raising prices is to first assess your position among customers. If you have been active in your field for many years and have regular customers and are known for their high quality, the price increase will not have many negative effects on the customer. But if you have not yet found your place among the customers and you are just finding a suitable place in the market, the price increase will probably cause you to lose your customers.
Do Not Raise Prices To Taste
Another important point in increasing the price is that you do not do it with taste! Honestly consider the real value of the service and product you want and change the prices accordingly. If the price of a product or service is higher than its true value, customers will notice it in no time and will probably not buy your product again.
Increase The Price To Suit All Your Customers
Another price increase strategy is to apply it to the financial capacity of all your customers. A certain group of your customers may be in a high position in terms of welfare and financial strength, and the increase in prices is not so important for them. But you should do the price increase in proportion to all your customers. To get the right price, find out how much an average monthly customer spends on your services and products on average. If your price increase is much higher than this average, you will undoubtedly lose a large number of your customers.
Eliminate Unprofitable Services And Products Instead Of Raising Prices
Increasing prices is not always the right strategy for your success. Sometimes you can achieve the desired profit with other solutions such as eliminating additional services and products. You may find that some of your peripherals and services are no longer attractive to customers and they do not pay much attention to them. Producing these products or providing these services is just a waste of energy and cost. Before applying a price increase, try to carefully examine this issue and eliminate them if there are non-profit services and products.
Check The Sales Pattern Before And After The Price Increase
To make sure that the price increase does not have a negative impact on your sales and business, be sure to check your sales pattern before and after the price increase. This will give you a policy and perspective for possible price increases in the coming years.