Sales and Marketing - Jen Jordan
Jen Jordan brings a wealth of life and leadership experiences to her writing. After 10 years creating a variety of content for a nonprofit, Jen decided to establish her own writing business. She specializes in creating high quality blog and website content for small businesses. When she's not writing, Jen is a competitive triathlete with a goal of completing a triathlon in all 50 states.
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Communicating Price Increases in Three Simple StepsKeeping existing customers is a top priority. The cost of new customer acquisition is seven times that of customer retention. When you consider the costs of gaining a new customer, 82% of companies feel retention is cheaper than the conversion process. Situations like conveying price increases require some planning to ensure you are retaining your existing customer base. Preparing for communicating a price increase, giving enough advanced information, and communicating clearly with your customers are three key steps to making price increases flow smoother. 1. Prepare for communicating price increases Plan your price increase to where it won’t be necessary to raise prices more than once a year. This helps prevent customer frustration while increasing trust. Decide on price changes and structures that fit your small business structure. This might include raising prices on everyone at once, scheduling increases to fall at an annual or renewal period, scaffolding prices to include tiers or packages, or using bulk offerings and incentives. Communicate with all teams and employees. Marketing, billing, and sales will all need to know how these increases will affect them to better communicate with customers moving forward and offer a shift in marketing strategy. Start over delivering in advance. Reinforcing the value of your products and services well in advance of any price changes can help boost retention and increase your customers’ sense of loyalty. Surveys reveal that 89% of customers view their experience as a main factor in driving retention and loyalty. Begin communicating about the upcoming price changes and reminding your customers about your value at least 100 days prior to the price hike. 2. Give plenty of advanced notification Establishing a communication action plan with details on how the price increase will allow you to deliver the same quality product will help reinforce the focus on value to your customers. Decide on a time frame that works best for your business and consumers. The time frame should be at least two months out and even up to a six-month notice. Consider your service, customer base, and product to establish a timeline that works best for clear communication and customer retention. Choose a best time for your business. You might use this time for renewing contracts at the current rate or running a seasonal special for incentives and bulk sales. This can help customers feel valued in being able to opt in with choices that new customers might not have. Reach out multiple times to be sure your customers feel respected and informed. Consider using more than one form of communication, such as direct mail, email, and text messages. Including a notice on your website along with places for frequently asked questions (FAQs) and a contact option can alleviate confusion and frustration during the process. 3. Communicate clearly Contact your customers directly and use transparent wording. Using the term "price increase" over implied terms will help convey trustworthiness. Loyal customers spend 67% more than new ones and value honesty. Offering details on the price increase, such as why it is necessary, your costs, and how operational increases might be used will further reinforce consumer trust. Personalize part of your message. Consider using part of your email template to personalize your message by confirming how long someone has been with you, their customer level, or price options for that specific customer. Noting individual details conveys sold customer service. Keep the information realistically brief. Busy customers want facts, but not an overly direct message with a harsh tone. Be sure the content of your price increase is informative, personalized, and direct. Avoid overexplaining, as this can lead to sounding more like an apology and leave room for distrust. Once you’ve done your research, formulated a plan for clear, transparent communication, and focused on delivering additional value, be confident in your business and your decisions. Returning to the things that won your customers in the first place will keep them with you moving forward. Sources: https://blog.hubspot.com/service/price-increase https://www.uschamber.com/co/grow/customers/communicating-price-increases https://www.consumerscu.org/blog/3-tips-for-communicating-a-price-increase-with-customers https://www.paldesk.com/how-to-introduce-a-price-increase-without-losing-your-customers/ https://www.priceintelligently.com/blog/5-steps-to-a-successful-price-increase https://www.wordstream.com/blog/ws/2021/08/03/price-increase-letter-examples |
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