No one likes paying more money. But price increases happen, and are necessary. The question is, how do you break the news to your regular customers? Here are some strategies to consider.
Strategies for developing your message:
- Make sure you understand the reason for the increase. This might sound like a no-brainer, but it’s important for you and your employees to be able to articulate a reason for an increase (beyond “it’s time”). Are you increasing prices because costs are going up? To be more in line with competitors? Because you haven’t increased prices in X years? We’re not suggesting you question your motives or that you feel guilty for raising prices. Instead, we’re recommending that you can clearly articulate your reasons because this will help with the next strategy.
- Determine which of these reasons, if any, you’ll share with your customers. Your customers might not necessarily care that you haven’t raised prices in two years or that your costs for x, y, z have gone up. Price increases always hurt because, as consumers, we’re thinking about our pocketbooks first. Still, depending on your customer base, certain reasons might be more compelling than others. For example, if you run a local coffee shop, and you need to increase prices to compete with the large chain that moved in down the street, that message might resonate with certain customers who are committed to buying from local-based businesses.
- Think about how you’ll handle negative reactions, questions, and concerns. Once you’ve developed your message and set your prices, you’ll want to make sure you’ve gotten your staff up to speed on the changes, including suggestions for dealing with negative reactions, the process for helping customers cancel their products or services, and answers to commonly asked questions.
Strategies for letting your customers know about price increases:
- If you have a storefront or office where customers visit, be sure to post notices, specifically at any reception and/or checkout area. The notice should include what services/products are being affected, the price increase, and the date the increase will take effect. Try giving as much notice as possible, ideally 30 days. After the rate increase, post slightly different notices that explain you’ve recently increased your rates. Another recommendation: at the end of the notice, have a “for more information” line along with a dedicated landing page on your website.
- Post a notice on your website. You don’t necessarily need to include it in the main navigation or on the home page, but you should create a landing people that you can refer your regular customers to if they have questions.
- Include a notice with any snail mailed correspondence, such as invoices, in the month leading up to the increase. Again, the notice itself can be short and sweet and list a link to the web page where the person can get further info.
- Mention it during sales calls, when appropriate. Let’s say you run a salon and the price of a haircut is going up by five dollars starting on June 1. As your regular customers book appointments, you can let them know about the price increase and direct them to the page on your website. Again, there’s no need to make apologies for it—be matter of fact and simply let your customers know that you’re mentioning it now so that they won’t have any surprises when they’re paying their bill. People usually appreciate the heads up.
- Use it as a marketing opportunity. If you’re worried your price increase is going to lose customers or be hard on customers, consider creating a promotion that will soften the blow in the short term. For example, if you own an acupuncture practice and you need to increase the price of treatments, offer a “deal” where people can book at the old rate for the next thirty days, IF they book (and keep) three appointments before a specific date. This shows you understand price increases can hurt and that you’re trying to do what you can for your longtime, loyal customers.
How do you handle price increases? What ways do you alert your customers? We want to hear your ideas, tips, and experiences. Share in the comments!