Every business must, at one point or another, share what’s viewed by customers as “unwelcome” news—the need for a price increase for products or services. Some businesses simply set the wheels in motion and hope for the best. Others tiptoe around the issue, never exactly coming clean about the price increase, and hope a small bump will go unnoticed (it rarely does). And, sadly, those who don’t go about a price increase in the right way often see an exodus of prized customers.
It doesn’t have to be this way. A carefully orchestrated rollout, combined with some advanced communications with valued clients, can ease the discomfort some customers will feel when the price of a favorite product or service goes up.
Here are suggested approaches:
Offer advance notice.
Alerting your target audience about a planned price increase sooner rather than later is a wise move. This gives customers the opportunity to re-evaluate their spending plans and prepare for the increase well ahead of time. This builds goodwill, rather than howls of outrage, which helps ease the process down the road.
After communicating in advance, ensure that “your key customers are notified, check email delivery results, and/or ask for a reply,” suggests the digital marketing firm Gravitec. Track how customers respond and, if it’s necessary to reply, “be polite, describe conditions, but do not apologise for your new plans and financial strategy.”
Advance notice should also be provided to your internal constituencies. Alert every employee within the organisation about what lies ahead, so they can process the change and favorably impact their own customer relationships.
Present the planned increase in a positive light.
In your general announcement, emphasise the continued value of your products or services, and that, in the end, customers will benefit. The message should stress “your ongoing commitment to the highest product quality and most efficient customer service,” along with any plans you have for “expanding personnel or acquiring state-of-the-art technology.” In the end, a price increase goes down better “if the customer feels your business is spending money to improve its quality for them.”
Provide answers to customer inquiries.
It’s likely some customers will have questions after a price increase announcement. Don’t let these enquiries go unanswered. Appoint one or more individuals who are thoroughly versed in the reasons behind the increase and have them responsible for providing more information to those who request it.
Otherwise, “a lack of information could cause them to turn to a competitor with lower prices,” notes HubSpot. Let customers know they can “always reach out … with any more questions or concerns that come up regarding the price increase.”
Offer intermediary pricing options.
Once you’ve determined upon a price increase, you shouldn’t back off or in any other way confuse customers about your new policy. In the interim before the increase goes into effect, you can hold onto customers by providing some short-term pricing alternatives:
- Offer tiered pricing opportunities for those wishing to lock in certain prices for an agreed-upon timeframe.
- Keep current prices for those who pay upfront (again, with an extended deadline).
- In the case of a new product launch, give customers the chance to get the new product with fewer features for a set time period, while also promoting the full range of benefits available with the new or upgraded product.
Finally, when the announcement is made, make absolutely certain that it’s included on your website, in all of your marketing materials, and your sales presentations. There’s no excuse for introducing any confusion about pricing once an increase has been announced.