Throughout the course of your business, you will undoubtedly be faced with the prospect of increasing your prices while making sure you don’t lose your customers. As long as you are truthful and you maintain your high quality products and customer service, you can rest easy with the knowledge that your clients likely aren’t going anywhere. If you find yourself in the situation of having to increase prices, here are some tips.
- Give an honest explanation for the increase and thank them for being loyal customers. It won’t take long for customers to notice a price increase, especially for items that they buy on a regular basis. The most important thing is for you to be honest. For example, a local business owner who designs and makes window treatments (curtains, draperies, etc.) gets most of her materials from out of state. Because of a recent increase in gas prices, her distributor is charging more for shipping. In order for her to maintain her profit margin and keep her business afloat, she must increase the price customers pay for both her supplies and services. Customers will understand and most likely relate to your reasons, so don’t keep them in the dark. Instead, thank them for understanding and show your appreciation for their loyalty. They won’t want to bring their business elsewhere if they know you sincerely care.
- Offer another lower price item. There will be times when a customer is unable or unwilling to pay the higher price, so in this situation you may want to offer an alternative. The window treatment designer offered her customers a similar fabric that is less expensive for her to buy, so she is able to pass that savings on to her customers. Again, be honest about what you are offering and why it is a lower price, but be sure to emphasize that it is of the same quality that your customers have come to expect.
- Add more value to your existing items. This is a great way to keep your customers happy despite the price hike. Add value to your items by offering an extra service or perhaps a discount on a future purchase. Listen to what your customers want, and be creative in finding ways to make them happy. In most cases, they won’t mind spending a few extra dollars if they know they are getting more for it, instead of less.
- Show how the increase gives them more for their dollar. When the window treatment designer explains the reasons for her price increase to her customers, she also makes a point of explaining that without the price increase, she wouldn’t be able to offer as wide of a selection of fabrics. This is a big selling point for her because her business is among only a handful of those like it in the region, and by far the one with the most choices. So for customers who are willing to pay the higher price, they are getting an expert who can offer them exactly what will be best for their needs.
- Demonstrate how the increase in price is not to increase profit. If you have been honest in your explanation and fair in your increase, it will become apparent to your customers that you are increasing your prices out of necessity, not greed. All too often, we read in the newspaper how large corporations are posting record profits, even in times of economic distress. Show your customers that your small business is unlike those corporations and that you need to increase your prices to maintain your business and livelihood. They will likely agree with you and understand the reasons for your actions.
By being honest with your customers and adding value to your products and services, you will maintain your clientele despite your prices going up. Your customers will appreciate your honesty and will remain loyal if they know you sincerely appreciate them in return. What are your ideas for keeping customers while raising your prices? Please share your comments with us!