Wednesday, October 20, 2021

How To Increase Your Prices

 If you have been in business for a little while, you might be getting to the point where you want to increase your prices. But how do you increase your prices and see more profit without upsetting your current customers?

This can be pretty difficult to tackle, specifically for those with a lot of clients who have been very used to the same price for the excellent service you provide.

And it’s not just about getting more profit, year-on-year the cost of labour and materials are rising, and many small businesses are fitting the bill for this. 

So if you are ready to up your prices and retain those customers, these are a few things for you to consider.

Photo by Fab Lentz on Unsplash

Ask them

Depending on the type of relationship you have with your customers and clients, you might be able to ask them what they are prepared to pay. If they have been enjoying excellent service for some years, they might be reluctant to pay more. 

However, when faced with the complete loss of your service, this might prompt them to find the extra change.

It is also possible to use some pricing model surveys to help you determine the type of increase your customers would be comfortable with. The Van Westendorp or Gabor Granger methods can come into play here. 

Offer more

Depending on the product or service you currently provide, you might be able to add some extra bonuses to encourage your loyal customers to stay with you. Everybody enjoys a bargain, but they might not mind the increase if you can throw in something extra.

This little extra does get a higher perceived value to your customers, which means a free gift, A sample, or a free service like wrapping or handwritten notes.

These added extras can often soften the blow of a price increase.

Improve the product

This can be tricky if your product or service already feels well thought out and of the highest quality. However, opening up the lines of feedback with your customers and clients could highlight a few areas that you can improve. 

Once you make those improvements, you stand a higher chance of increasing the prices without apologising or explaining.

Just do it

One of the most important things is that you could adjust to increase your prices. So long as you are not raising it too high, and you are not growing it for any current customers who have a rolling subscription and thus a contracted contract. You are free to simply raise your prices at regular intervals.

You must treat any customers with long-standing relationships with care. They aren’t likely to go elsewhere but they are the ones who might push back the hardest against the change. 

It is standard for most businesses to raise their prices incrementally every six months to a year.

Just remember that when you are planning your price increase, there will likely be some backlash from unhappy customers, even if they love the product. And you will need to change all of your pricing models, terms and conditions, as well as all of the other contractual amounts too - so plan it well. 

Are you balancing a small business and family? You’re not alone! Get great tips here: Productivity Tools for Moms Who Work At Home.

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