Growing Pains: Retain Customers While Raising Prices

Many growing businesses have to raise the prices of their products or services at some point. As costs increase and multiply, your business will lose money unless you adapt. So, instead of losing money, you can raise your prices and hope for the best. In order to encourage customers to remain loyal to your business, make sure you emphasize the benefits that are coming with the price increase. For example, you can offer technology upgrades or improved customer service. Here are a few other reasons for raising prices:

(Curated from Pittsburgh Business Times)

• You can slowly introduce price increases to customers in small increments instead of putting the new price out there all at once. "From the clients perspective, gradually phasing in price increases is preferable to pushing through the total increase immediately."
• If you offer several services, you can raise the price of only one at a time. So, when a customer uses more than one service you can "remind them you ar holding the line on pricing for the other two."
• Another great way of introducing a price increase to customers is by converting the numbers to cost per day. For example, saying your product or service only costs an extra 50 cents a day seems much more reasonable than an additional $15 a month.
• For customers who are reluctant to pay the price increase, you can offer an option allowing them to keep the old service without the new benefits to keep the original pricing. This won't be a popular choice because most customers will want to try the additional benefits before making their decision.

Once you've established a reason for increasing prices, consider the best way to communicate the new price to customers. You should give them a heads up before raising prices. Letting customers know ahead of time about a price increase shows you considered their needs and preferences before making the decision. Also, give them your reasons for raising prices and emphasize the benefits they will receive as a result. They know businesses need to turn a profit to keep providing services and products so they will be understanding if you explain your position.

Finally, end on a positive note! Let me your customers know you appreciate their patronage and thank them for it. If they feel appreciated, customers will be more willing to see your side of the issue. If you need more business advice, check out our small businesses resources! We offer everything from consulting to technology training.

Image by Andrew Magill

•