How to Increase Prices without Losing Customers
Many businesses are in a quandary lately. Inflation, pandemics and supply chain disruptions have impacted their costs, making it more expensive to do business.
Inflationary pressures are also affecting customers. Consumers seek deals and spend money for what they need, not necessarily what they want.
Many businesses in this situation think that raising their prices is the solution, but hesitates for fear that it will drive away customers.
In business, companies sometimes have a difficult time when they have to increase the price of a product.
Raising the price of a product is of course not an easy thing, because consumers do not always understand this decision.
To avoid the impact of price increases, such as losing customers and lack of interest, companies must use the right tips and strategies to work around this.
How do you increase the price of a product without losing customers? Here are some methods that you can do!
Outreach to Customers
Consumers are the most important factor in a business, price increases will usually have an immediate impact on consumer decisions in buying a product.
Inform consumers about the price increase plan so that consumers know in advance and understand your decision.
Do not make important decisions without involving consumers.
You can socialize the price change online, such as: social media, e-mail, broadcast, or online shop.
You can make a banner or some kind of ad that contains the price change plan in the future.
Explain Profits Not Excuses
Don't blame it on inflation. Explain to customers, the benefits or value-added that they will get and what you provide with the increase in the price of the product.
Think about the psychological state of the customer. There are no consumers who want to pay a higher price without additional benefits that they can get.
The brand image of a business will affect the psychological confidence of consumers to continue to buy products produced by the company.
With a good brand image, consumers will always be sure that your product is the best in their field, so they don't mind too much about price increases because of the satisfaction and trust they feel.
Give Honest Explanations
It's important to be transparent and not hide the fact that your prices are going up.
Use clear language when communicating price hikes to customers.
Call that action a price increase, not a price adjustment, price change, or other euphemism. While this may seem like a small thing, euphemistic messages can do serious damage, damaging relationships with loyal customers.
Many consumers are aware of the state of the economy as a whole, so when you tell customers you're raising your price, it confirms them, and most accept it.
After an announcement regarding a price increase, customers will usually ask about the details of the price increase.
Providing an honest explanation to the customer will help the customer to understand the reason for the increase in price. (score.org)
Give an honest and logical explanation of why the company needs to increase its price. Your explanation must make sense, because they will continue to compare your price with competitors.
If you own a service or B2B business, let your customers know ahead of time that you plan to increase your prices. You can use the upcoming price hike as a customer retention technique.
Make it clear to the customer that you will increase your price, but as a reward for being a loyal customer, you will keep their current price if they renew their contract now.
Give Bonuses or Gifts
Sometimes when customers know of a product increase, they will discourage them from buying.
To get around this problem, you can give special bonuses in the form of lottery coupons or prizes.
This is done so that customers think that even though there is a slight increase in price, the benefits that consumers will get are still more.
You can also work around this by providing certain bonuses with a certain minimum purchase.
This method is done so that you can keep your customers loyal.
Give a Touch Up to the Product
Give a new touch to your product, for example by creating a new, more attractive packaging, updating the quality of the packaging, or beautifying your packaging for shipping goods.
You can also create new views on your online store and business social media accounts.
So, customers feel that the price increase is in accordance with the increase in the quality of your products and services.
One of the consumer behaviors is that they always want to get more than what they have given and don't want to be disadvantaged, so to increase the price of a product, companies must do the calculations well.
One way to calculate the increase in product prices, is usually obtained from calculating the cost of goods sold or COGS arising from production costs.
To make it easier for the company to calculate the HPP, the finance department can use software.
Those are some tips or methods you can use to increase the price of the products you sell without losing customers.
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