From time to time, every business faces the question of raising its prices. It’s unpleasant for clients, so you need proven methods of informing them in the softest way possible. To maintain customer loyalty and continue stable growth, explore tips on how to announce your price increase correctly.
Let’s learn how to start the dialogue with regular customers, and inform them of price changes, so as not to lose their trust or their business.
How to Announce a Price Increase to Your Customers
You create your brand image yourself, thus you’re the author of the entire story of your product. A price increase can be shocking, or it can be part of a product’s overall narrative.
Loyal customers will accept changes without frustration if these changes are imprinted in the client’s view of the product. However, you should know your competition, and be aware of all the risks.
Here are nine proven ways to tell customers about a price increase.
Be Transparent and Clear
The clearer you are with your customers, the less potential there will be for misunderstanding. Don’t hide price changes, send emails to inform customers in advance. If they have time to check out the new terms and conditions, they are less likely to make emotional decisions.
Publish price increase announcements on your website to inform new visitors about changes. Show both old and new prices, as well as the percent increase. Transparency helps customers to make a choice. You don’t force them to accept changes. Instead, allow them to make an informed decision.
Make Change Easy for Customers to Implement
Give your customers a limited-time offer to receive the new product with fewer options at the current price. Set a time limit for this offer. And, highlight the benefits of the new full-featured product. This will give them time to consider the value of paying a higher price.
Provide a guide on how to upgrade to the new version of your product.
If customers are fully informed about changes, and understand them, they are more likely to remain as customers. In the case of B2B companies, your clients are interested in a stable relationship. A modest price increase is typically not a serious problem.
Update Your Marketing Materials
Be sure to update all of your marketing materials to reflect the new conditions. Check any presentations to make sure that any new customers are given correct information.
You may need a new strategy for communicating with customers. Once you have it settled, discuss it with all of your employees. Ensure that every manager, marketer, etc. are aware of price changes. Think about how to announce a price increase to clients, and highlight the main reasons for it. Inform all customers as soon as possible, according to the new strategy.
Announce the Price Increase Directly to Your Customers
Personal attention makes your communication more valuable. It is particularly important to communicate directly with your clients on sensitive topics, such as price changes. Make sure your key customers are notified, check email delivery results, and/or ask for a reply. Provide customers with full info about new prices. Note their requests and comments. Be polite, describe conditions, but do not apologize for your new plans and financial strategy.
In your email of a price increase, note the duration of the business relationship with your client, and what you have achieved together. Form a unique offer for this customer with personal conditions.
Offer to Chat or Call
For many customers, personal communication with company staff is important. This is especially true if they need a better understanding of the reasons for the change. Offer them the opportunity to speak with a manager or executive. Transparency shows your loyalty to your customers. You show that you have nothing to hide, and you strengthen your client’s confidence in you. If they can reach out with concerns or questions to anyone in your company, you build trust even in the matter of price increase.
One option is to add a Call-To-Action button in the email so that customers can contact you for further questions, or provide a chat feature in a user profile on your website.
Give the Reasons for a Price Increase
Some common reasons for a price increase:
- Increased production costs
- New services or product options
- Changes in operating costs
If customers know the reasons, they won’t feel cheated. Such reasoning makes it clear that you’re not chasing undue profits, but are merely responding to the market environment.
Offer to Keep Current Pricing if a Customer Pays Upfront
Provide customers the option to maintain the current pricing, if they pay upfront. Set timelines and payment limits. This will keep the client’s costs at the current level, but you will get payments sooner.
For example, if your company introduces upgraded software service at a higher price, you can set a time period to use it at the current price, paid upfront. However, keep in mind that maintaining the current pricing will hurt your profitability in the long run.
Focus on the Positive
Focus customer attention on the increased value of your product. Remind them of the importance of your relationship; show the benefits of your company, accomplishments, and plans for further development. Your product solves their problems. So, an improved product, at an increased price will only improve the relationship. Focus on that. On the contrary, if the price increase is due to inflation, focus on maintaining consistently good product quality.
Show that your client is getting what he is paying for!
Thank Your Customers
Thank your clients! Let them know that you’re happy to have their business. They are as much a part of your business as your employees. If the product is in demand, your company will be successful. However, the longevity of your business depends on how much you care about maintaining long-term relationships with your customers. So, if you lose a client, be polite and appreciative of the relationship you have had. Maybe, one day they will come back and you’ll get to start all over again!
Read about customer lifecycle marketing.
Let’s sum up
- Transparency and clarity increases customer trust, and decrease their frustration after the announcement of a price change.
- Provide clients with a range of alternatives, so that they can make a decision based on their current needs or budget.
- Inform customers directly with a personal message. Make sure they are aware of price increases in advance.
- Update your marketing materials. Enact a new strategy for communicating with customers, and that all employees follow the strategy.
- Offer customers the opportunity to speak to anyone in your organization to address possible questions and concerns.
- An explanation for a price increase provides clients the ability to make informed decisions.
- Provide an option to receive services at the current price, paid in advance. Set terms and limits.
- Focus on the benefits of your service; emphasize product quality and improvements.
- Communicate in an appreciative and polite manner to show your loyalty to them.
The value of every product changes with time and its price will likely change periodically. Don’t be afraid to modify your financial strategy depending on market conditions, product development or other reasons. But, appropriate and timely communication is the key to successful and long-term partnerships with your clients.