When you run a business, there will be times when you feel you are beholden to your customers, that you have to do exactly what they dictate to make any sales at all.
Although customers are, of course, hugely important, you need to remember that this is your business, and you need to run it in the way you see fit, not in the way that someone else is telling you. You need to be able to make a profit, and if that means raising your prices, that’s exactly what you need to do.
It can be a worrying idea. What will happen to your customers if you were to raise your prices to a more profitable level? Will you lose them all? Would it be a colossal mistake? In some cases, for some businesses, it would be a mistake – but that’s because they won’t be offering what they need to offer to make the idea more palatable. Read on to find out what we mean.
If you raise your prices overnight without giving your customers any advance warning, the shock could be so much of a surprise that they stop using you because of it, not even thinking about the mechanics of the price rise itself. Don’t hide what you are doing; if you need or want to put your prices up, make sure that your customers know in advance of the date you are planning to make the changes. This will give them the time needed to get used to the idea, plus it will allow them to look around and determine whether your new prices are fair or not. If you have done your own research, they will be fair, and your customers will see that, and stick with you.
There will always be some that will buy from a cheaper competitor, and these are the people who are more concerned with price than with quality or loyalty. This is sure to happen, so don’t worry about this group; concentrate on the group that understands quality and has bought into your brand, showing brand loyalty, about which you can read more here. These are the ones that will stay with you as long as you are honest with them at all times.
You need to do what is right for your business, and yourself. If that means putting your prices up, that’s what you should do – don’t feel guilty and don’t leave your prices low just to please your customers (there are many other ways to keep your customers happy). However, when you do put your prices up, try to offer a reason or reasons for why you are doing it. This isn’t an obligation for you to do, but it can help them to understand what is happening.
It might be that the cost of living is rising and you want to be able to pay your staff more, or perhaps your landlord has put the rent up, or your suppliers are asking for more money. They will more than likely have had to deal with similar issues themselves either at work or in the home, so it will ensure they have a better understanding of the situation.
Simply putting your prices up and offering nothing but the same products for more money is a risky strategy. Sometimes it will work, but what will always work is offering something more than before. The customers will feel that they are getting a better deal, and you will retain more of them into the future, keeping your sales and profits at a healthy level.
What you must not do is to offer additional items or services that will negate the extra profit you were trying to make by putting your prices up; there is just no point in doing this. However, starting a loyalty scheme that will give a free gift or money off coupons once a certain level is reached can be extremely effective. Or perhaps you will invest some of your new profits into ensuring that your website is easier to use, or that your staff are better trained when it comes to customer service. These things will be noticed, and people will be willing to pay more to enjoy them.
Offer A Low-Cost Option
Sometimes the price of products and services is a big issue for customers; they may have a limited budget, or perhaps just like to spend in a savvy way. If this is something you are finding is the case when you try to sell your higher priced goods, why not offer a low-cost option too? If you do this, you will need to ensure that the lower priced item has a noticeably lower value than the higher priced one. Customers will be able to compare the two items and choose whether they want quality or a low price. They can see exactly what more money will get them.
This can prevent you from losing customers who are all about price, and although you won’t be making much profit from them, even a little will add to the final total and boost your sales in the end.
Is your business one that over delivers? Do you go the extra mile and make a positive difference in people’s lives? If so, raising your prices will be much less of an issue than if you just sell goods and don’t concern yourself with giving more than you need to.
When you do more for your customers it will be less of a surprise when you raise your prices; they might even be expecting it, surprised that you can offer everything you do for the prices you pay. It might even be that raising your prices makes them more confident in you, keeping them happy that you will be around for a long time to come and that they can keep buying from you in the future.