The cost of living and running a business is rising. Big companies are increasing their prices. If you need to too, here is some help:
- Stay competitive – Know how competitors charge and justify. Google, mystery shop, ask suppliers and customers.
- Know your USP – Similar competitor products = similar prices. Do something no one else does, charge a premium. Focus here!
- Position as experts – People pay more. Thought leadership – stories, blogs, columns (like this).
- Satisfy – Chasing 100% satisfaction is a way to go out of business. Ensure you are satisfying the right customers first. Eliminate reasons to compare.
- Learn from your best customer relationships – Share good reasons for raising prices, ask how this might affect them. Use what you learn in increase notifications.
- Pricing – You may not need to raise everything. Separate high and lower value. A weighting towards high value, maybe you can lower others. If it’s in your favour then not such a negative.
- Notifications – Notify increases in advance so they have time to adjust their prices too. The best wording will even make some respect you.
- Wording – Explain why, including their positives, be human, empathetic. Explain value, USP, you appreciate their business. Eg: “…to maintain the level of service you have come to appreciate…; We only sell quality…; The cost of (x) has been increasing but for the last (y) years we have absorbed this…; Our (x) product is the only (y) in the market that does this…
Present as an opportunity: “We are improving how we (x). You will find this better this way”. Offer support. - Justify increases – Material, labour, distribution costs. Industry trends, improved quality, better service.
- Be direct, clear and brief – Use key points. Include the value and how it will be worth it. Be clear – how much and when. Being brief and direct displays confidence, vagueness doesn’t.
- Be regular – Small increases once a year, beat leaps.
(Written by Chris Norris from a session between members of the Independent Board)