Communicating Price Increases to Your Customers Without Losing Business

This post originally appeared on INSIGHT2PROFIT.com Recently, INSIGHT2PROFIT worked with a manufacturer that had not executed a price increase in nearly three years. There had been individual negotiations, but overall, pricing had remained relatively flat. While the company was a market leader, it was ignoring the pricing lever for profitability. Our team worked with theirs to determine a plan for strategic price increases, as well as a process for conditioning customers to expect those increases. Here are the steps we took, which you can utilize to ensure your own success in communicating price increases to your customers without losing business. Step 1: Start Addressing the Issue Informally First You know sales is all about building relationships, so leverage yours. Instead of waiting for a letter to be sent to everybody, which does not make anyone feel like a priority, start reaching out. Whether it is over the phone or over lunch, start the conversation: “I wanted to let you know we are looking at a pricing initiative to better reflect the value our organization is providing.” The more you can do to ensure your customers are not surprised with a price increase, the more successful you will be. Taking that a step further, developing a cadence for price increases can help guarantee pricing excellence: Communicating with your customers to an extent that they expect a price increase every year or six months (or whatever period fits your business model), the conversation shifts from “why are you raising prices?” to “what is the price increase?” Step 2: Create Supporting Documentation Given that it had been several years before the organization’s sales team had gone before a customer and said, "We’re going to raise our prices," INSIGHT2PROFIT helped to build an extensive communication package. It covered a draft of the letter that would…read more >