How To Increase Your Prices Without Losing Your Customers?
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Have your prices been the same for a few years?
Or perhaps your customers always rave about how inexpensive your services or products are?
If you’ve been undercharging your clients, it’s time to raise your prices.
But how do you do so without losing your existing customers?
After all, you’ve invested a lot of time, money, and effort into building strong relationships with your customer base, and you wouldn’t want to scare them away with your price increase.
In this short guide, we’ll discuss the best ways to increase your pricing without upsetting your clients so that you can improve your bottom line and continue to deliver outstanding services to your customers.
Increasing Your Prices The Right Way
Adopt The Right Mindset
This can seem a bit cliché and not particularly actionable advice. Yet, it’s anything but. The first roadblock you’ll encounter when deciding to raise your prices is yourself. You might think that if you increase your rates, your customers will be mad and head straight for the competition. But the reality is that you can’t continue to deliver great products or services if you can’t afford to stay in business. So, instead of believing that increasing your prices is bad news for your customers, think of it as a good thing for them as it will allow them to continue to have access to your range of products or services. Factoring in price increases as part of your business plan is a great way to overcome this fear.
Timing Is Everything
If you work in an industry with low and high seasons, increasing your prices during the low season or when things are slow might not be the best move. However, if you feel like you’re constantly under the pump and the demand exceeds your capacity, raising your prices makes complete sense.
In this scenario, losing extremely price-conscious customers can actually be a good thing. This will allow you to reduce your workload and focus on customers who are ready to pay more for your services, enabling you to work less for more money.
Also, if you’re planning to raise your rates in the coming weeks or months, make sure to deliver an outstanding service in the lead-up to it.
A bonus point about timing is to give some notice before increasing your prices. You should tell your customers that prices will be increasing, by how much and when, so they don't get hit with a sudden shock when you actually do increase prices. More on this below.
People love anything free.
So, one of the best ways to increase your pricing without ringing alarm bells with your customers is to throw in something extra in the bargain. The idea is to offer something that is little to no cost to you but market it in a way that your clients see value in paying a bit more to get this extra for free.
For instance, if you’re a personal trainer and you want to increase your hourly rate, you could offer an eBook about the best home exercises to tone up or meal plans to gain muscle. Or, if you’re a professional cleaner, you could bundle your services and offer free interior window cleaning with your higher packages.
Sure, sending an email to your clients to let them know about your price increase is daunting.
How are they going to react?
Well, the answer is, it really depends on how you communicate about it. If you explain that you need to adjust your pricing structure due to the increased cost of doing business and show them they’ll keep getting incredible value for the price, they’ll be more likely to respond positively.
Consumers appreciate transparency, and being honest is the best approach you can take when increasing your pricing as it creates trust.
When wording your communications, make sure to sound empathetic and always offer alternatives. Tell your customers that you’re open to working towards a compromise if necessary. This will help you build an emotional connection and show the human side of your business.
Factor In All Expenses, Including Business Insurance
Business insurance isn’t just another cost to add to the never-ending expenses you probably have as a small business owner. Business insurance is an investment that will keep you in business, allowing you to protect your company against costly claims and legal fees.
And if you’re time-poor and need help finding the best policy cover for your business, jump onto our instant quote generator, where you can get an estimate on market-leading insurance in seconds.
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