Raising your prices without losing your customers.
For any business owner this is one of the hardest hurdles to change within your business. On the one hand you can’t keep absorbing the wholesale price hikes or the cost of having employees increases, for example Super contributions. Whilst you want to keep your loyal customers loyal and not scare them away, it is time to increase your prices, which you can do in a planned and a strategic manner.
It's all in the planning
It all comes down to planning and careful consideration. I know what you are thinking if you increase your prices you will scare away your loyal customers. However, you might be surprised to know your loyal clients will accept the price increase as they value your work, and in charging a premium YOU are valuing yourself as to the experience and workmanship that you offer. If you prepare your clients and ensure they understand the time frame and the reasoning behind the increase- this will make the blow a little less and they will be less likely to kick up a stink.
Price increase idea #1
It can be hard to decide what to increase your prices to. What makes sense- what will be enough to ensure you cover your costs and are making a decent profit? It could be the case of increasing your prices of some services and not others, this may help to soften the blow with your customers, or you could have a couple of incremental price increases over a 6 month period to help manage expectations of your customers.
Price increase idea #2
Another way to increase your prices is utilising seasonal times to up your prices that make sense to your customers. For example during certain times of the year builders are in demand due to weather conditions etc. This would be an ideal time to up the prices, as from a customer's perspective this makes logical sense.
Price increase idea #3
Have you heard your customer comment that you are really cheap? Or are you struggling to keep up with demand? If you are experiencing this then it is time to increase your prices. It will help to find customers that won’t waste your time with having to always negotiate with them and you will be able to filter out time wasters.
Offering some a little more…
If you feel like that you are still a little unsure as to the reaction of your clients there are a some extra strategies you could action, including; offering extra customer service, for example give them some extra time and offer free advice, an efficient booking service and prompt follow up- this will help to elevate your reputation with customers so they won’t blink and eye when you need to increase your prices.
And lastly have a contingency plan ready to go to work through any complaints either online or having to answer phone calls. Be prepared and transparent to explain the reasoning behind the price increase and be confident in your decisions.
If you aren’t sure as to how much you can raise your prices, or what you need to raise them to, give me a call. I can analyse your position and help you to make those hard decisions.