How to Raise the Price

Submitted 6/25/2013 by Kaloyan Georgiev

There is a time in a company's lifetime (if long enough) when it needs to raise the price of the goods or services it provides. Now, when you first hear "raise the price" you probably connect it with customers leaving. This isn't quite necessary if the raise is done right. Here are the ground rules:

1. Always have a good reason - and I mean good for your customers and for you. Your clients probably know that there are many good reasons for a companies to raise their prices, so you need to give them one of those. They will understand if your support costs are raising or if the material provider raised his own prices. They clearly understand that you can't work without profit. So give them an honest and clear reason. "Because we need more money" is honest reason, yes, but not a clear one.

2. Warn the customers - when at some point you realize you need to raise the price of your products you need to act quick and warn the customers as soon as possible. Customers hate surprises, so keep them informed on what's going on through the corporate blog or the newsletter. Give them time to adapt their budget. Warn them at least a month before the raise, because springing with the news out of the blue will chase them away.

3. Make it easy on the loyal customers - give them a discount. If you need to raise the price with 20%, then make it 25% for new customers and give the current customers a temporary 15% discount from the new price. This is going to show them you care. Customers love it when you care. They love it more than cheap prices.