You’ve worked hard to create a good relationships with your customers. But, as your business expands and your needs increase, you now must face the inevitable: raising the price of your small business products. Although this action is necessary, you fear that it will drive customers away.
Here are a few tips on how to approach this sensitive task and still keep your customers happy.
Think About Timing
You’ve heard this again and again – timing is everything! So, if you’re planning to increase prices, make sure it’s the right moment to do so.
How is your current customer situation? How many customers do you have on a regular basis? What percentage of your customers are loyal, how many are regulars and what percentage consists of new, one-time clients? How appreciated are your products or services?
The bottom line is that you should be in a pretty good spot before you raise prices. Otherwise, you could risk too much.
Hiding from your customers won’t work forever. Instead, be honest and explain the situation and the reasons behind increasing the price of your small business products. You will see that most of your customers are going to accept it more easily if you’re upfront with them.
Tell them how you will be using the additional capital and why you need it. For example, if you plan on using the extra cash flow on improving the products, then let your customers know what new features they can expect to see.
And don’t forget to thank them! Your business wouldn’t exist if it weren’t for them, so express your appreciation for the choosing your business.
Plan Some Discounts
Raising prices means you’ll probably lose a few customers that are more frugal than others, so as a strategy to keep them, you can try offering a few discounts. Customers will be more likely to accept the price increase if you also offer them a good bargain.
Throw in Something Extra
People are usually much more likely to accept a price increase if they’re receiving something extra. Think about your options and what other product or service you could add without it making a hole in your budget. Maybe you can partner up with another business and provide additional services. Or maybe you can focus on a specific cause. For instance, if you’re a printing company, you could argue that yes, you’ve increased the price, but now you are also offering high-quality, responsibly-sourced paper, such as the one sold by Double A.
Before you drop the news on your clients, try raising your prices only with a few to see what the general reaction is. You can try doing this either with some of the clients you think are friendlier and more attached to your products or with a new batch of customers. They may be willing to pay more, but less than what you’re asking, so be flexible and prepare for any possibility.
Raising the price of your small business products is not easy, and you’ll always encounter some push-back from your clients. But, with the right strategy and a little thoughtfulness you can make the process as easy as possible both for you and your customers.