Secrets Of Increasing Prices And Yet Keeping Your Customers.
As the economy weakens, your expenses are steadily climbing to new highs. There will come a time you’ll have to raise your own prices. But because of loyalty to your customer there will be anxiety in using the pricing gun. Will your best customers show their wroth and walk away to your competition.
Look at the situation as an opportunity to hold your core customers. It’s plausible that you’ll lose some people. But it is good logic to have a smaller group of people who are willing to pay more and stay with you longer.
To calculate a price increase it’s good to first check the competition’s price, also the necessity of your overhead will determine your bottom line price increase.
Now try to figure out what protective aura your customers are in before a price increase and which clients might walk. Ask yourself what can happen “If you increase prices which clients will you possibly lose?” Because that 6 percent increase may only net out only a 4 percent increase.
If you wish to make a change remember; these customers most likely to make a fuss about a price hike; are also your least profitable, and you’ll be better off with them gone.
To help get your customers with your new program, give them as much notice as possible. In fact if you’re thinking about a price increase 5 months from now, send out a letter immediately stating why your price increase, and you haven’t increased your price yet but you may have to do it at some point; therefore, you’ll have opened dialogue for a future price increase and then it becomes easier.
Tame your pricing structure, instead of doing a larger price increase for a package of several products, separate the products and increase the price of each.
Another option is to offer a new pricing model: good, better, best. If the customer decides he doesn’t want the extras, he can take the midpriced product.
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