<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=349935452247528&amp;ev=PageView&amp;noscript=1">
Search
word-map-thumb

The Alternative Board Blog

The Key to Raising Prices Without Sacrificing Customers

Oct. 24, 2017 | Posted by The Alternative Board
raise prices and keep customers

It’s a challenge every business faces at some point in its lifecycle—the need to raise prices in order to maintain operations and secure revenue to finance future growth. But the marketplace is littered with companies that attempted to achieve this goal but lost much of their valued customer base. One wrong step along the price-increase process and customers can feel mistreated, alienated and turned off enough to no longer purchase the company’s goods or services, even if they’ve been rewarded in the past with quality care and products.

The key to raising prices is designing the right strategy, coupled with a sense of timing and an all-out communications effort to persuade a loyal customer base that the price hike is both appropriate and promising of better things to come. Here are tactics to consider when you’re ready to raise prices:

Leave no ambiguity about the services you provide. Hopefully, you’ve laid the groundwork to clearly differentiate between what your business provides and how it stacks up compared to what’s offered by the competition. But it never hurts to further expand upon how your specific solutions effectively address problems that your customers can’t find elsewhere.

A good time for a price hike is when you can upgrade your product’s differentiating factor into an even more streamlined solution for the problems your customers face.

Incorporate price hikes in your strategic plans. Some companies mistakenly wait for what seems to customers an arbitrary time to suddenly announce a price increase in their goods and services. Instead, consider incorporating a comprehensive pricing strategy as part of your long-range business objectives, thus anticipating the influence of market forces, competitive gains in the marketplace, and other factors.

Being in a position where you can anticipate the next scheduled price hike enables you to prepare your customer base for that eventuality.

Want additional insight? Best Ways to Secure Capital for Your Business now to learn more

DOWNLOAD

Investigate tiered pricing opportunities. Different customers may be willing to pay different prices for your business offerings. Multiple price points often make sense for retail and service businesses but can be applied to any business that offers a tiered pricing system with varying levels of service (or product upgrades) at different prices. This approach also gets customers more comfortable with price increases, making it possible to introduce across-the-board price hikes at a later date.

Communicate intentions in a positive light. Any increase in costs to customers will incur some level of push-back. For this reason, it’s critically important to communicate ahead of time your intention to take this step. Moreover, framing your message in a positive light—rather than blaming inflation or your own manufacturing/distribution expenses—can smooth the path toward eventual acceptance.

Emphasize your ongoing commitment to the highest product quality and most efficient customer service, as well as any investments your business has made in expanding personnel or acquiring state-of-the-art technology. Price increases go down better if the customer feels your business is spending money to improve its quality for them.

Test a price increase. It’s natural to expect objections from customers, but that’s not always the case with a rise in prices. “Your best customers might even wonder why you haven’t done it sooner,” notes Small Business BC, which adds that if you do have concerns about your existing client basis, “you could always introduce the changed pricing on new clients only.” This helps you gauge the effect of higher prices for your products in the marketplace.

Finally, help cushion the impact of a proposed rise in prices by offering one-time consultation services or other form of specialized assistance to your customers. This demonstrates how important they are to you, as well as your willingness to go above and beyond on their behalf.

Want to learn more about strategic planning and price increases? Find out if a TAB Board is right for you!

 

Read our 19 Reasons You Need a Business Owner Advisory Board

DOWNLOAD

Written by The Alternative Board

Related posts

5 Tips for Handling Bad Customer Reviews
Jul. 2, 2021 | Posted by The Alternative Board
No business wants to get a bad review for its products or services. However, since it’s impossible to please all customers all the time, the likelihood of encountering dissatisfied customer reviews...
Journey Mapping and the Road to Customer Retention
Jun. 22, 2021 | Posted by The Alternative Board
How well do you know your typical customer’s purchasing journey? Successful businesses work hard to understand this journey, from initial awareness of a need for your product, the subsequent...
A Quick Guide to Winning Back Lost Customers
Jun. 15, 2021 | Posted by The Alternative Board
Losing a customer is always cause for concern, but it can also be a learning opportunity. Businesses face a constant challenge of thoroughly understanding customer buying behavior, and when that...
Improving Your Accounts Receivables Process
Jan. 8, 2021 | Posted by The Alternative Board
Most businesses offer a solution to problems or otherwise fulfill a need experienced by their target audience. They can only go on doing this if—in exchange for delivering a valued good or...
Now is a Good Time to Cut Business Expenditures
Dec. 30, 2020 | Posted by The Alternative Board
In “normal” times, businesses often face the challenge of reducing expenditures while maintaining efficiency and productivity within their business operations. As we have noted before, “excessive...
Does Your Sales Team Possess Client Engagement Skills?
Dec. 28, 2020 | Posted by The Alternative Board
We hear a lot of talk about the importance of employee engagement, but how well do members of your sales team engage with current and prospective clients? Whenever a customer and salesperson talk...
The Pros and Cons of Invoice Financing
Dec. 23, 2020 | Posted by The Alternative Board
Businesses are often haunted by customers who consistently pay their invoices later than expected, or by those who don’t pay at all. A great deal of time, effort, and resources can be consumed by...
12 Ways to Make Budgeting And Forecasting Easier
Dec. 21, 2020 | Posted by The Alternative Board
Building and implementing a budgeting and forecasting process is critical to revenue growth. In today's fiercely disruptive and competitive world, the importance of such an approach cannot be...
5 Ways to Surprise and Delight Your Customers in 2021
Dec. 17, 2020 | Posted by The Alternative Board
Customers are a lot savvier than they used to be. With tools like the internet and social media at their disposal, they can do a great deal of preliminary research before embarking upon the...
How to Improve Your Team’s Customer Service Skills
Dec. 10, 2020 | Posted by The Alternative Board
No one can predict what will happen to the business landscape in 2021 (look how far off the experts were about 2020, pre-coronavirus pandemic!). But one constant will remain in place next year, and...