How to increase your prices without increasing customer churn? Price is one of the ‘4 Ps of Marketing’, thus here are 4 Ps you should keep in mind when it comes to implementing a price increase. Here are four keys to raising your prices without losing customers:
- Give plenty of notice
It’s not fun to talk about raising prices; in fact, it practically invites customer complaints and requests that a planned price increase be abandoned. However, springing a price increase on customers as a “surprise” may be far more damaging to your business.
- Put it in a positive light
Often price increases are needed to maintain healthy profit margins that allow a business to continue to provide a better customer experience than that offered by competitors, or even to make improvements to facilities or the level of quality the business can provide. When you decide to raise prices, be sure that you tell customers about the positive benefits they will receive as a result.
- Focus on percentages
If the percentage of a planned price increase is less than the percentage that your business’s costs have increased, that’s a percentage you can point to when communicating with your customers. In fact, if the percentage of your price increase is a considerably smaller number than that of increased costs, your customers may even be appreciative as they perceive you are not passing on all of the cost increases to them.There are other percentages you can point to in order to avoid negative customer reactions when raising prices. For instance, you can point to VIP, member or bulk purchase options that result in percentage of savings for your customers, or the percentage of savings they could enjoy by visiting more often or increasing the amount they purchase.
- Phase it in over time
Phasing in price increases over time, rather than all at once, can keep more customers in the fold as they have the opportunity to gradually adjust their budgets rather than experiencing a dramatic increase in spending all at once.Maintaining adequate cash flow is important for every business, and nearly every business experiences an occasional cash flow challenge. Our business financing alternatives could help your organization maintain more consistent cash flow or provide money during cyclical or seasonal downturns.