Price increases are part of today’s business environment. Unless you live on the moon, you are experiencing them from your suppliers, too, and will pass those on to your customers also. However, if you handle the price increase the wrong way, you will also likely be losing some of those customers, too.
One of our listeners, Alan Flower, has a pickle regarding the need to increase his prices without losing his customers. Since our advice not to raise prices or to decrease prices instead will end up with him going out of business, we came up with a few other, more practical, ideas.
The fact is no one wants a price increase. So, on its face, it seems like an impossible scenario. However, it might surprise you to learn that there are ways to increase a customer’s price, maintain your company’s margins, and keep most of your customers.
In this episode, we explore the many ways you can soften the blow of a necessary price increase to retain as many customers as possible while doing what you need to do for your bottom line.
Key Ideas to Improve your Customer Experience
Communication is the underlying theme of this exercise. Many of the suggestions we make during this podcast relate to the “how” of communicating. However, the why of it is just as essential, so be sure that you pay attention to both when you inform your customers of an impending price increase—or face their wrath instead.
Here are a few key moments in the discussion:
- 03:51 The first suggestion we make is to set proper expectations, which includes giving people time to adjust to the news; upping prices without warning will not get this price increase process off to a very good start.
- 07:25 Ryan explains how using framing is an essential way to manage the outcome of the price increase conversation, and that without it, you can make a mess of this process pretty fast.
- 11:06 Colin shares some things not to do, deceptive practices that you might get away with, until you don’t, and then the consequences can be severe, like Shrinkflation.
- 17:35 We explore sweetening the offering with companion products or services that add value, a situation that make a price increase much more palatable to customers.
- 19:34 We look at the value in delaying a price increase or taking it incrementally instead of all at once.
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