Raising your prices can be a difficult decision to make. You are probably worrying about the effects it will have on your business and the relationship you have with your customer base. However, by taking the time to research your customer base and create an appropriate strategy, the process will be smooth sailing.
Here are five tactics to raise your prices, without losing clients:
1. Change the Name and Description
Language is a powerful tool. Today’s shoppers are savvy, so if you’re using the same names and terms for your products and services as your competitors you will have more issues with increasing your price.. When you use a new description, it not only encourages conversation, with clients asking what it is, but also differentiates you from the crowd, making the premium price seem justifiable.
2. Charge Per Project, Not Per Hour
If you are in a service based industry, it is traditional to charge by the hour. On first glance this seems to make the most sense; you know you are being compensated for your time and it’sclear to your clients the value they’re receiving. But what if you become a lot more efficient at you work? It doesn’t mean that the quality of your work has dropped, yet you will start to get paid less for the task you’re completing. By charging per project, it rewards your new found efficiency, allows you to complete more projects and therefore makes you more money.
3. Create Additional Value
If you’re working in a saturated market it’s important to differentiate yourself from your competitors; creating additional value for your clients is a great way to do just that. If you provide marketing or branding services, have a mini-toolkit of checklists and templates to help clients use their new brand after you have completed the service. If you sell garden plants, have fact sheets on how to care for each of your plants that the customer can take home with them. These This type of bonus materialbundled packages will be unique to you and help you demonstrate added value when raising your prices.
4. Explain Why
By simply raising your prices, without any explanation, your customers will get annoyed and make up their own explanation, which may not be favourable. They may simply suspect that you are getting greedy and taking advantage of them. If you take time to explain that you have expanded your staff to deliver a better quality product, or whatever the reason, the customer will accept the change more easily.
5. Test the Waters
It’s easy to worry about raising your prices and to lose sleep over the decision, but you may well be surprised by your customers’ reactions. Your best customers might even wonder why you hadn’t done it sooner. However, if you are worried about your current client base you could always introduce the changed pricing on new clients only. This will allow you to test the waters before increasing them across the board.
How you pitch and position your price increases can determine the success of your business. One of the most important things to remember when making changes to your business is to gain the buy-in of your entire staff. If they do not understand your reasoning and do not support it, they will not communicate it effectively to your customers. So, remember to make sure everyone is on the same page before taking the jump.