Increasing Prices Without Losing Customers

There are many challenges in running a business. One of the greatest is knowing when the right time is to raise the price of your products or services. Last month subscribers to my SoundADvice newsletter received this information in their inbox.  I’ll add you to my SoundADvice email newsletter too if you want.  It’s absolutely free, and I don’t pass along your information to anyone.  Just email me, Scott@ScLoHo.net and ask for the SoundADvice newsletter.  It comes most Wednesdays and is written by my friend Rick at ENS media. Now let’s look at the tips that deal with raising prices because most business owners are faced with this decision.

With the increase in competition and all the talk about potential tariffs, there are more and more articles in business trades about the advantages and disadvantages of tariffs, and how they will affect pricing for both products and services.

One known fact is that consumers nearly always remain loyal to name brands and businesses they have an emotional connection to. If your business relationship with your customers is transactional, meaning price is the most important factor, raising prices is especially difficult. However, if your business with customers is relational, it’s much easier to implement price increases.

Simply put, people do business with people they trust, and they purchase products that they trust! If they don’t know you on a relational level, the chance of them staying with you when you raise prices decreases, dramatically!

Have you ever noticed within your company that people who “like” you and “trust” you rarely ask about the price? Whereas the customers or potential customers that you have not yet built a relationship with inquire about pricing significantly more often.

Raising or increasing prices is a struggle for every business owner. The thought of even having to deal with questions from customers about “why” can be exhausting. However, as the cost of goods increases, along with salaries and wages, rent, and all other related costs of business increases, so must your cost of goods or services. The trick is raising prices without raising a ruckus or losing customers.

Tip #7 of our Tips For Raising Your Prices Without Losing Customers is Don’t Promote or Apologize for Price Increase. Even your best and most loyal customers don’t want to hear that you’re increasing the price of your goods or services. But (there is always a “but”), if you must notify your customers, do it quickly, in as few words as possible, and don’t apologize!

Because some of your customers are transactional, rather than relational, even the best-run businesses will lose some customers when they increase prices. However, as your competitors are forced to increase their prices, you too will have an opportunity to gain some new customers as well.

In most business climates, raising prices is a must just to stay even, much less survive. Increasing your prices must be done with careful thought. If you would like some tips on how to approach raising your prices without losing customers, click here.