How to Communicate a Price Increase Without Losing Clients
Price increases are a touchy subject. No one wants to pay more for a product they’ve already had access to at a lower price. However, these hikes are also necessary for businesses to survive. A price increase is often needed to keep up with cost-of-operating factors like wage increases, inflation, supply chain shortages and demand shifts. That’s why when it happens, it’s crucial that you communicate any changes clearly and promptly with your customers.
The way you communicate a price increase to your customers can spell the difference between keeping them allied or pushing them away. If you really drop the ball and surprise them with a price hike, you even run the risk of losing your clients altogether. Excellent customer service should always be a business focus, especially in tricky situations like these.
What strategies can you implement in order to ensure this excellent service? How can you communicate a price increase in a manner that doesn’t drive away your loyal base?
Communicate With Transparency
When it comes to client relations, transparency is key. Businesses need to be thoughtful about how they break the bad news to their clients, especially those who may not take the news well. It is important to be completely honest about the situation, but it is equally important to deliver the news gently.
Newsletters or emails may suffice when dealing with large, impersonal dealer networks or wholesalers. When it comes to nurturing relationships, however, peer-to-peer communication is often better. Prioritize telling your most important customers about any increases first via a personalized phone call. They shouldn’t find out later on through the grapevine—and they certainly shouldn’t find out as a surprise on their next billing statement! Either of these could put a strain on your relationship and potentially cost you a client.
Give Clients Time To Process The Change
When you break the news about a price increase to your clients, give them the time they need to digest the change. Some customers may not be prepared or equipped to deal with a price change, especially on short notice. It’s crucial that you cushion enough time between announcement and implementation for customers to plan their next moves.
Giving your clients time to adjust to the price increase allows them to update their own systems accordingly. It also keeps you aligned and in compliance with any arrangements you may already have with them. Keep in mind, however, that your customers may also look for an alternative supplier to do business with. They may try out more economical options if they do not think that they can match your price change in time. That is why providing them with a respectful timeline is crucial.
Provide Value Over The Increase
Today’s customers are all about value, they want to know their money is going as far as it can with your business. However, value is in the eye of the beholder—different clients judge a product or service’s value differently. It is important to clearly communicate what you can offer to your clients based on their specific needs so they can accurately assess how you can benefit their business.
While some customers might initially seem put off by an increase in prices, they may find it easier to cope if they see your product’s value. Price increases happen for various reasons: labor costs, product costs further down the pipeline, quality maintenance, among others. Communicate the “why” to your client, and assure them that it’s to keep service top-notch in the face of changing conditions. If they know they are getting the quality they deserve and can see where you fit in their business model, they will find the price increase easier to swallow. Reassure your customers that they can expect better quality from you on the other side of the increase, and you are likely to retain them.
Train Your Sales Team For Any Price Increase
Your sales team is your direct line of contact to customers. They are responsible for communicating any price hikes to your customers—and this may subject them to added stress. They stand in the direct line of fire for potentially upset customers, so you need to train and equip them with the tools needed to handle tricky situations.
Role-playing can prove an effective strategy for training your sales team. These activities can significantly improve the way reps direct conversations and deliver messages to customers.
Sales teams must be able to put themselves in their customers’ shoes. What questions might customers have about any increase? What kind of support can they offer a customer when delivering the news? Questions like these can help your sales team see things from the customer’s perspective and generate appropriate responses. Provide your sales team with hypothetical scenarios, so they know how to respond should the need arise.
Find The Right Tool To Empower Your Sales Team
Price increases happen. Sometimes it’s an increased labor or product cost for your own business. Sometimes it’s onboarding a new product that will help your performance exceed expectations and boost ROI, like a modern, interactive presentation tool such as Ingage. You don’t have to let these increases damage your relationship with your clients!
Be sure to keep communication crystal clear with your clients about any changes. Provide a clear timeline on when they can expect any developments, and give your team the language and strategy to handle any client distress. Perhaps you can even demonstrate the use of any new products you’re bringing on, preparing a crisp slide deck illustrating the changes.
As an innovative, user-friendly presentation software, Ingage can help you break the news to clients in the clearest way. Who knows—maybe you’ll even inspire clients to sign up for Ingage themselves! Supercharge your sales delivery: reach out to Ingage and set up a free demo today.