Asking your customers to pay more than they used to isn’t as difficult as you’d think, even in the current economic slowdown.
By Craig Falck for Africa Report
Photograph: © Rtbilder | Dreamstime.com
For 99.99 percent of the population, there is such a thing as a limited amount of money lying around. In fact, the global economic crash that we’re in the middle of has actually made life a lot more difficult for people. The petrol price keeps rising, food is more expensive, water and electricity increase each year at an unacceptable rate just to cover up the mismanagement of the utilities companies… And now you need to increase your pricing too. Here’s how to do it.
You will need to investigate why you need to do a price increase and understand the motives for this move. Once you’ve done that, you will be able to calculate (or your accountant will) how much you need or can increase the price of your product or service. Be realistic and understand that there will be a lot of people who’re unhappy with the increase. But likewise, there’ll be a lot of people who won’t bat an eyelid and will continue buying from you.
Investigate the competition’s pricing structure and make sure that you don’t exceed this. If people can get a product cheaper somewhere else, they won’t hesitate in dropping you for another supplier. This, especially in the current economic state, is something that you literally can’t afford to have happen.
When you’ve decided how much you’re going to increase your product price, decide how you’re going to let your customers know. Some enterprises send out email pricing guides to customers, you could print out a new price list and put it up in your store for customers to see, you could print it large on the product itself, or you could do what most other enterprises do… focus on something else about the product and not draw any attention to the change. Magazines, for example, will increase their price every January like clockwork. You’re asking people to pay more, so make them feel like they’re getting even more value for their money by making bigger, brighter and bolder headlines, add new features in the magazine, etc. – you need to take the customer’s mind away from the increase and hope that it won’t stop them from buying it when they get to the till.
Increasing prices is tricky business. You need to work accurately on the figures and find one that will benefit you while at the same time not scare off your customers. Remember: there will always be someone willing to sell at a lower price. It’s your job to make sure that your customers return to you.
