How to Raise Prices Of Your Products / Services In This Post Pandemic Era And Make It Convincing For Your Customers.

Let's face it, the cost of living is never going to stop increasing. Despite the pandemic's depressing business impact, we saw an inflation?and we’re currently experiencing higher inflation rates. And one of the surprising indicator is the cost of housing, which is soaring at various cities across the globe.

So, what does this mean for your business? In order to sustain and scale you also need to optimize the costs and have to raise prices to justify your business growth. Of course, raising your prices can be a tricky procedure. From knowing how much to bump your price to preventing dedicated customers from jumping ship, there's a lot to consider.

And if you are not someone, who is willing to this tough call because of reasons justified to you, your profit margins are only going to decrease as the rest of the world raises their prices and only you can imagine the impact on your business with that.

If you're looking to raise prices without losing customers, I would like to support you and share with you my learnings and experience on how to increase prices in an ever-changing world with your customers backing you.

Let’s first understand the top signs to raise prices before you jump into raising your prices and remember whether you offer a service or a product, the basic principles remain the same.

1.?????Your Opportunity To Close Rate

If your opportunity to close rate is good, you may be thinking you're right on track. On the contrary, a good close rate sometimes is actually an indication that either you're giving your customers more than enough for their money or you are genuinely a super salesman.

However, in the best possible scenarios, the opportunity to close rate should be above 60 - 70% percent. While it seems counterintuitive to aim for a lower close rate, the fact is that a close rate higher than this really just means you are under-selling yourself and lower than this means you are or might be bleeding soon. Instead of offering the lowest price out there, raising your price can bring you in more sustainable income and send a message of professionalism and authority to your customers.

2.?????You Haven't Raised Prices in a While

As we mentioned above, the cost of living is continually rising. This probably means the cost of your materials or your staff's wages have been increasing as well. At the end of the day, everyone needs to be able to make a profit to survive and grow. With this in mind, if it's been a while since you raised your prices, you're probably more than justified in approaching the subject. While you may lose a few clients and customers along the way, keeping your rates the same for too long sends a message to your audience that you aren't keeping up with the times.

3.?????Your Prices are Well Below Competitors

Have a look at your closest competitors, Are your prices well below the industry standard?

Remember the rule that while offering a competitive price can be a benefit, having too much of a gap between you and your competition can actually make you look inexperienced and unqualified. Remember, your?perceived value?goes a long way to landing loyal customers, so don't be afraid to reflect your worth in your pricing.

How to Raise Prices Without Losing Customers

Now that you've determined it's time to make a change in your pricing schedule, it's time to act. Here are a few simple steps to help you tackle price increases while keeping your customers happy and loyal. ?

1.?????Research Your Increase

Don't just pick a new price out of thin air. Take some time to audit your cost components, research your competitors and get to know the going rate within your unique industry. You want your new prices to be competitive but not too far off of the industry standard.

Analyzing the data is the best way to approach any business change – especially when customers are involved. You may discover that your price increase only needs to be a small percentage or perhaps you've got a big jump to make. If you plan to raise your prices by a substantial amount, consider taking this in phases to avoid making customers angry and contract cancellations.

2.?????Don't Be Sneaky

If you're thinking your customers won't notice if you bump up your price tag - you're wrong. Instead of trying to be sneaky about your increase, involving your customers in to this process and taking a buy in from them will be the best way. In fact, you may find it more beneficial to increase your price for new clients first and slowly transition your existing accounts to match.?

When you let your loyal customers know your prices have gone up but you are on a mission to make the transition a smooth as possible for them, they'll appreciate your efforts and may even place a higher value on your services. A little respect for your clients goes a long way to retaining accounts and even earning new ones.

3.?????Explain Your Reasons

Wondering how to tell your customers you are raising prices? It's probably easier than you think. When it comes down to it, everyone understands the rising cost of business and for the most part, no one will be upset with you for trying to make a living and if they are without being considerate they there is point sticking with them as well.

The most appropriate way is to give your customers plenty of notice when the change is coming and take the time to let them know the reasons behind your increase. Be as transparent as possible and let them know your materials are now more expensive or an increase in demand has caused you to increase the price to deliver the customers the outcome (product / service) they deserve.

4.?????Don't Apologize

While it can be tempting to chuck in an apology at the end of your increase notice, it's incredibly important that you don't include this statement. Apologizing for your price increase is as good as telling your customers you aren't worth the extra cost.

Instead, practice confidence in your brand by thanking them for their continuing business and expressing your excitement to continue to offer them the best products and services possible. After all, you have absolutely?no reason to apologize?for your growing business!

5.?????Expect Drastic Change

At the end of the day, you'll win some and you'll lose some. While it can be heartbreaking to lose a loyal client, you simply can't afford to keep your prices low forever. This means you'll likely lose a few customers along the way. Fortunately, you'll also gain some customers who may have never considered you before.

A price increase goes hand in hand with increased perceived value. That means your new price point now opens you up to a whole new group of consumers looking to buy your product / services. We know?change can be scary, but don't avoid increasing prices out of fear of losing a few accounts. Your new price, new audience and your improvement in the skills set of closing more, you will definitely make up for the loss.?

I hope you have got enough information and reasons to start working on your pricing strategy. In my next article I will be sharing ways to approach this process of price increase to make it more digestible for your customers. Till then waiting for your feedbacks on this article on [email protected].