Costs around running a business goes up every year, but when was the last time you decided to increase your prices ?
Many business owners and managers worry that if they were to increase prices, they would lose customers. However, customers will often be willing to pay a higher price if they are getting great value for their money.
A good way to increase your prices can be to bundle products or services together and offer the combined bundle at a price that offers value to the customer. For example, a phone contract might have a higher price but it may include a bundle such as unlimited calls and 20GB of data per month. The key is providing value to the customer.
Find a way to differentiate your offering. Perhaps you could offer new online services to your customers such as an online portal or an app. You could speed up processes so customers receive a more efficient product or service from your firm, compared to others. If you offer something that is seen to be the best in its class, that offers a benefit to your customers, you may be able to increase your prices.
You can test a higher pricing strategy on new customers. Your existing customers might be resistant to a price increase but new clients will be unfamiliar with your pricing so they may accept the higher price if they feel that you offer more value to them than your competitors.
Communication is key…
If you do increase your prices for existing customers, you need to communicate well and explain clearly why you had to make the decision to increase your prices. Do your market research to make sure that your pricing isn’t completely out of line with competitors. If your business is not significantly different to the nearest competition, you may run the risk of losing clients.
Large sudden jumps in your prices will not go down well. Instead, introduce gradual increases such as 5% or 10% per year, depending on the type of business that you run. Everyone knows that the cost of doing business goes up each year. If you communicate with your customers, they may be more receptive to small increases.