Greg Raymond is a training and development strategist at RedRover Sales & Marketing Strategy
When planning your price increase, you probably thought about it all: The appropriate increase amount based on competitive standards; which products or services will be affected; and, the amount of business your company can afford to lose as a result of the change. But too often companies forget their customers when they outline a price increase strategy. A communication plan is a key part of implementation and should never be an afterthought.
Price increases are a necessary part of business. If they weren’t, we’d still be paying five cents for a can of soda. Companies must constantly conduct research to ensure pricing is maintained at an optimal level. Your understandable list of reasons doesn’t mean your customers will be happy about paying more for the same service, however. The key to a successful price increase lies within your ability to add value and control the message.
Consider these strategies for leveraging a price increase to create more value for your customers and actually increase customer satisfaction.
• Communicate your price increase to your staff early and confidently. It’s easy to lose sight of the fact that your business is still the best option for customers, even when your offering is now priced more highly. The level of confidence you have when you communicate your price increase will determine the amount of success you have. Create a list of the ways your customers have benefitted from your products or services. Estimate the value of that help, and include the times you’ve helped at no extra cost. This information motivates your sales team and gives them added edge when talking to customers.
• Educate your customers on their options. Talk to your customers about how much it will cost to switch suppliers, and communicate what you are offering your customer that you know a cheaper competitor can’t offer. Package additional value into what you do to ensure your company remains the obvious choice.
• Increase loyalty by asking customers for their advice. Customers feel more loyal when they know you value their feedback and feelings. Consult with top customers to explain that your business needs to increase pricing without diminishing perceived value. You can gain valuable insights to help guide your communication plan while you secure early buy-in from your critical accounts.
• Plan alternative offerings. People don’t like change that’s thrust upon them. Offer your customers a reduced offering at a lower price point. When you give an alternative, your customers will feel more in control, allowing them to feel better about choosing to continue with your product or service at a higher price point.
When it comes to rolling out pricing increases, include your sales and marketing teams in implementation planning. Communicate with your employees and customers early and openly to ensure success.
Greg Raymond can be reached at www.redrovercompany.com.