Raising Your Prices: The Right Decision at the Right Time
If you are a business owner, you will eventually struggle with the notion of raising company prices or rates. If you are in business long enough, there’s no getting around the fact that you’ll eventually have to charge more for what you offer. The best way to deliver the news to your customers in a way that softens the blow may seem difficult and something that you aren't terribly excited about doing. Unfortunately, it has to be done; however, it doesn't have to be a task you dread.
1. The best time to tell your customers
2. Explaining why rates and prices must increase
3. Matching the value you bring with your prices and rates
Determining the best time to tell your customers
As a general rule of thumb, no business should randomly decide to raise prices immediately after the idea pops into mind. Companies should always give a little leeway and notify their customers of an up and coming date when prices will change. News of price increases should be given in advance to allow customers to be aware and become comfortable with the adjustment, therefore avoiding any unnecessary "shock.” This will give customers time to get into contact with your business to get clarification on questions they might have. Also, you may see a jump in business just before the price increase, as those who have been putting off making a decision will take the plunge and buy so they can get in before the price increase. By letting them know of your changes in advance, customers may not be as put off about price increases and will appreciate the time given so they can plan for it themselves.
In general, the best times to increase prices for a business is at the start of a new month or year. After deciding the date, let your customers know of the coming change at least a month in advance. The sooner you let them know, the more appreciative they will be.
Explain to your customers why the decision has been made
No matter how solid the reason for raising rates and prices, there are those that will “squawk” at the increase. It is up to you as the business owner to explain and try to help your customers understand, and hopefully, agree with your reasoning.
Of course, there are many reasons that may necessitate a rate increase. Maybe your business is offering new, additional services or you've upgraded your offerings to become more advanced or sophisticated. Or, maybe you need to keep up with the market and your competition. One of the most common reasons to raise prices or rates is that the cost of doing business has increased.
No matter what the reason, be clear with your customers from the very start. Find and explain the benefits the price increase can have for them. Maybe the increase in prices will allow you to provide better customer service or offer things customers previously did not have access to.
New rates should reflect the value you bring
People understand that prices go up, and if you can provide them with honest and valid reasoning, you will see that your customers are ready to trust you and your decision. Of course, it always helps if you do good work for them, have quality products and have gained their trust.
If you are a business owner who provides customers with multiple services, then you know the time and work that goes into making sure your customers are completely satisfied with the results. Be proud of your successes, and make sure that it is reflected in your prices. Keep in mind, if you are priced at the bottom of the market, some potential customers will view what you offer as low in quality as well.
If you find it's time for your business to increase prices, don't fret. Respect your customers by letting them know when and why your business is making a change, and they will respect that you were straightforward with them.
So let’s follow our article’s advice and be straightforward. Starting this July, we will be increasing our prices from $80 an hour to $100 an hour. Increasing our prices has been in talks for some time now, and we stand behind our starting date.
WordwrightWeb will never jump the gun on any decision and make clients “just deal with it.” We wanted to let you know and be aware of our change as soon as possible. We respect and value all of our clients highly.
So why the change? What’s been going on over at WordwrightWeb? Well, we’ll tell you!
In short, we are happy and we are busy. We’re working with a number of amazing clients and providing each one with multiple services. As technology evolves, so do we. We keep up with the newest design and programming software and we are always researching and implementing new marketing strategies. Our clients deserve the best, so we give the best. We’re proud of our work! Wordwright is also growing - both in clients and staff. As our plate gets bigger, we look for those who are ready to join us on our journey. It’s an exciting time!
So don’t forget - July is when our prices will increase. But, just in case, we’ll keep you notified from time to time until July.
Thanks for your time, your business and your trust in us to help you grow your companies and your sales. In return, you have helped us grow too. High fives to everyone because we've all earned it!