Council Post: How To Increase Your Prices In Uncertain Times

President at CRMDialer.com & IRISCRM.com. Overseeing the growth of e-commerce payments & writing on payments, growth hacks & SMB efficiency.

We just raised our prices — in the midst of one of the biggest economic crises we’ve had in years. It was a necessary move for many reasons, and it certainly wasn’t easy. Even more certainly, a good chunk of our customers won’t be happy about it.

Raising your prices is not easy and should not be taken lightly. Here are some of the ways to make it easier on yourself and your customers, no matter what you sell.

Cut To The Chase

Many business owners feel like they need to tell a story about why they’re increasing their prices. They go as far as writing entire essays, justifying their decision with a multitude of reasons. If you do this, the only thing that will happen is that your email won’t get read.

Instead of writing pages, be quick and to the point. State that you’re increasing your prices, and get on to say why and what it means for current and future customers. If you really want to create a detailed account of your reasons, create a separate article and link to it.

State Your Reasons Quickly And Objectively

It’s safe to say that no one will be happy about paying more. The one way to soften the blow is to explain why you’re raising your rates. In our case, we have not changed our prices in five years, and we launched a ton of new features that we didn’t have before. Hopefully, that will convince the customers that the increase is justified.

Once again, be quick about it.

Show Value

Sure, you have your reasons to ask for more money, but what’s in it for the customer? For every reason you’re increasing your prices, tell the customers what it means for them. For example, one of ours was that we had to hire new staff to keep our operations running. Because of this, we promised our customers less downtime, decreased time to resolving customer issues and a stronger product road map with more features in the future.

However, there is one thing you should not do: Don’t lie and promise things you cannot deliver. You can turn every reason for increasing your prices into a compelling reason for customers to keep on buying, but always stay honest.

Personalize Whenever You Can

Before launching a campaign to tell all of our customers that we were raising our prices, we sent a few personal emails to customers who have been with us for the longest and for whom a price increase meant paying $7,500 instead of $5,000 per quarter — in other words, faithful customers who spent big bucks. If you have customers like these, make sure to write them a personalized email reflecting on your relationship and thanking them for staying with you for so long.

On the flip side, some companies in our industries have grandfathered accounts that have the same pricing from the moment they joined. It’s a worthy strategy to consider, but has its downsides too.

For the rest of your customers, make sure to create segments and personalize based on their industry, company size, the position of the recipient and other relevant details. This is an email that you want to be read like it’s from an old friend and not sent out as another email blast.

Let Your Customers Know In Advance

Some of your customers will want to stop using your product or switch to an alternative. Others will want time to think about sticking with you. Whatever the case, they will need time to find another company, especially if your product is crucial for their business. Let them know at least a month in advance before changing your pricing so they have enough time to react.

This is a chance to offer your current customers a plan at your old pricing — for example, paying for three months or a year in advance at your old prices before moving on to new prices. That way, you get a nice financial boost to make up for some of the customers you will inevitably lose, and they get to save more money by paying in advance. It’s a win-win situation.

Increasing your prices is not easy, especially at a time when everyone is either dumping their prices or giving away their products virtually for free. However, if you focus on the right reasons for the price increase and explain what the customers will gain, you will find that you can get out of the process with happier customers and more revenue.


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