Deciding to raise your prices can be a big step for your business. The next crucial step is to make sure your customers know what’s changing, why and when your new pricing takes effect.
If you’ve decided it’s the right time to increase your prices, it’s important to invest time in planning how to share the news of your new pricing.
Our small business advisor Steve McLaren recommends being clear and direct about your price increase. “If your customers are fully informed regarding the changes, they are likely to be more understanding and willing to accept them,” he says.
Here are Steve’s top tips for sharing your new pricing with customers.
Be clear and confident about your prices
Let your customers know what’s changing and when the new prices will take effect. It’s also important to let your customers know why your prices are changing. Steve says there’s no need to apologise for raising your prices, but be transparent with your customers.
“To be fully transparent, publish your price increases on your website and direct your customers to any new terms and conditions,” says Steve. “Don’t bury your prices on your website, make it clear. If you don’t already have a pricing page on your website, this could be the time to create one.”
“Price increases can be frustrating for customers, especially if they’ve been paying the same price for your product or service for years. Provide customers with an explanation – this could be higher material costs, new services or features, additional staff, or increased operating costs.”
“One thing you don’t want to do is imply that you’re chasing profits. This sends a negative message to your customers and may harm your business’s image. Keep the focus on customer satisfaction and the value your business will continue to deliver.”
Update your sales and promotional materials
“Before your new pricing takes effect, you might need to allow time to update your signage, marketing materials and or sales presentations with the latest information about your pricing structure,” says Steve.
This could also be an opportunity to add a clause to let your customers know these prices are correct at the time of publication but may be subject to change.
Give your customers notice in advance
Steve notes that nobody wants to be surprised by a price increase. “If your customer hears about your increase from another customer or when they receive an invoice, they may not be too happy about it.”
“Give customers enough notice to manage your new pricing. For example, they may have to adjust their budget or consider other options. The more notice you can give, the easier it will be for your customers to keep working with you.”
According to Steve, announcing a price increase is also a chance to thank your customers for their support and loyalty. “A price increase is never easy news to deliver, but this allows you to reinforce the reasons behind your decision. Be polite and genuine, and thank your customers for their understanding and continued patronage.”
Consider the best way to contact your customers
If you speak with your customers in person or by phone on a regular basis, you might want use this opportunity to share your pricing news too. If an in-person conversation isn’t right for your business, Steve says you can still provide personal attention when you announce your price increase.
“An email or letter is acceptable for many customers, as long as it doesn’t begin with ‘Dear Customer.’ Instead, use your customer’s name, and provide a way for them to reach out to you directly if they have any questions or concerns.”
Be prepared for questions
Some of your customers might have questions or want to know more. Perhaps they are confused, concerned, or simply curious.
“Make sure your customers know that they can reach out to you with questions or concerns at any time,” says Steve. “If you find that many customers are confused by your announcement, it’s time to revisit your communication plan. Consult with one or two trusted customers to find out what’s lacking, and adjust your message accordingly.”
Make sure your team members know the details
“Before announcing your new pricing structure, make sure your employees understand the new pricing. If an employee charges a customer the wrong price, it could be a frustrating and embarrassing experience.“
Steve adds that it’s important to make sure your employees understand specific details about your offerings so there aren’t any miscommunications. You don’t want to put a customer in the awkward position of challenging their bill or invoice.
Steve’s final tip is to focus on the future of your small business. “Reinforce that you are committed to providing the best value to your customers while you continue to grow. Justify the price increase and show how it will help meet your customers’ needs.”
If you’d like to discuss pricing strategies or an issue facing your business, book an appointment with our free business advisory service.