So you’ve decided it’s time to raise your prices.
Maybe it’s because your product has grown, maybe it’s due to inflation, or maybe it’s something else.
When prices go up, the anger-o-meter and panic-o-meter usually follow.
But when the inflation is on a steady rise and costs of goods and services all skyrocket, you can either follow along or call it a day.
How do you make the bump less painful to customers?
Here’s what we’d suggest based on our own experience increasing prices
Raise your price in chunks, not gradually
Every quarter, evaluate your growth and adjust your prices accordingly.
Don’t change them every week or every month.
The less often you raise your prices, the fewer times customers will ever have to think about it.
Justify price hikes with quality improvements
If we increase demand for your product by 20%, for example, a 10% price hike feels almost generous to sponsors.
If you’re selling T-shirts, maybe it’s because you’re using a better fabric quality that justifies the price increase.
Frame it this way to ease your customers’ frustration and show them the value they’re getting in return.
Having a good reason is better than having none at all
It’s much easier to increase your prices if you have a reason for doing so, particularly if that reason is something that benefits your customers.
If you’re raising prices due to external factors, try to find ways to justify that increase.
Raising prices is industry-dependent
So can you raise your prices without a customer backlash? According to reports, it depends on the industry.
Walking on eggshells
Businesses where low price drives customer satisfaction such as consumer durables, apparel, software, tech, can expect some disgruntled customers if they raise their prices.
On the other hand, industries where there’s a higher brand loyalty like automotive, household, and personal products tend to not feel the same heat.
There’s one constant, though. Companies with high customer satisfaction always have an easier time when the time comes to raise the price.
Why we care
If you’re running a business, you’re probably already faced with the Hamletian dilemma – to raise or not to raise.
But it looks like the only real question is – have you built enough loyalty and reputation?
Because if you did, your customers are much more likely to accept the change, regardless of the industry.
Raising prices is an art, not a science
We don’t have a rigid plan for increasing our prices over any given quarter or year because nobody can predict the future.
The best thing to do is reflect on what’s right for your business, and decide when it’s time to make adjustments.
We hope our suggestions make those adjustments a little easier!