Every now and again, a business has to decide whether or not they want to increase their prices. It can often be an uncomfortable experience for you and the customer. To prevent this happening, it’s important to make sure you notify them in the best way possible.
If a price increase is well executed, it can result in better business for you along with more loyal customers. In this guide, we’ll talk about the best ways to notify your customers by covering the following:
- Communicate with them directly
- Give them time to process your decision
- Give the reasons behind your decision
- Be open to conversation
- Reward loyal customers
- Provide a helpful guide if necessary
- Update all of your marketing materials
- Focus on the benefits
- Thank your customers
Communicate with them directly
The more upfront and honest you are about this change, the more likely that your customer will think logically and make an informed decision about your service. Even a small price increase that is unclear or hidden could cause a backlash and lose you customers.
The best thing to do is to go through your list of current customers, contact them directly and personalise your announcement wherever possible. You should also be certain of your decision and make sure you don’t come across as apologetic. Hesitation might cause confusion or lead to customers trying to take advantage of your uncertainty.
Give them time to process your decision
It’s also important to remember that the price increase impacts other businesses than your own. Your customers might have to adjust their budgets, talk to their accountant or consider alternative options.
By letting them know about the changes in good time, you give them the opportunity to think about your new pricing and decide what to do. This way, you also show your customers that you care about how they feel too.
Give the reasons behind your decision
Price increases can cause your customers to question why you’re changing something that has been the same for months or even years. You can justify your decision by giving them a number of reasons why you have decided to increase your prices. Some of these reasons could include:
- More employees
- Difficulty sourcing raw materials or resources
- An upgrade to the product or service
- Increase in costs of running your business
- Your business has become more well known
- You offer a better service than before
When justifying your price increase, remember to reassure them of the benefits to them. Be clear about the changes to minimise the risk of a misunderstanding between you and your customers. Put all of your cards on the table so your customer can make a rational decision to accept it or not.
Be open to conversation
Don’t be afraid to offer to have a conversation with your customers about your decision. Show the more human side of your business and your appreciation for their business. Offer to answer any questions or concerns that they might have to give them all of the information they need.
If you’re sending an email, let your customers know that you want to hear back from them and make it easy to contact you. This is a great way to build trust and loyalty.
Reward loyal customers
Speaking of loyal customers, why not reward them for their business over the last few months or years? You can use this time of change to create a new deal for your customers and get them on board for the new alterations. Make them an exclusive offer and set a timeline before the new price kicks in. Here are a few different ways you could do it:
- Sign up for a one-year subscription for the old pricing
- Sign up for three months and receive the new upgrade at the same price as before
- Subscribe to our new pricing plan today and receive one month free
This can be a great way of motivating your customers to pay upfront, giving you a short-term boost in sales and giving your customers savings in the long run.
Provide a helpful guide if necessary
If the reason for your price increase is upgrading your product or service, it’s important to provide your customers with the right information. It’s also a great way to show them how your new upgrade is going to make their lives easier. There’s a number of ways you can help your customers to understand the new changes:
- Free demonstrations or consultations
- Webinars where they can ask questions at the end
- A helpful video series
- An in-depth blog post
- An e-book or brochure detailing the new changes
Update all of your marketing materials
Forgetting to update your marketing message is a very easy mistake to make. You need to check everywhere that could have the old prices listed. If customers see material with the old price, they may feel entitled to the lower charge, meaning you could end up losing money. Make sure to update your:
- Sales presentations
- Social media channels
Along with any other marketing material that displays your price. Double check that everything is updated.
Focus on the benefits
Use this opportunity to show the benefits of the new product or service and remind them of your relationship with them, aka why they chose to work with or buy from you. Show them the problems you help solve, the successes you’ve had together, and your plans for the future. Demonstrate how the increased price will result in improving your service for them.
Thank your customers
Lastly, don’t forget to show some appreciation for your customers. Without them, there is no business. Tell them that you value their business, feedback and most importantly their relationship.
If you end up losing some customers along the way, be sure to always be polite and appreciative, you never know; they might want to be your customer again, maybe even sooner rather than later.
How Countingup can simplify your finances
Now that you know how to increase your prices, why not make the rest of your business finances easier to manage? The Countingup business current account automates your bookkeeping admin and provides real-time insights into your cash flow so that you can look after your finances more efficiently.
View your profit and loss, tax estimates and the ability to send invoices instantly to keep your business running smoothly all in one simple app. Find out more here.