A Simple Guide Raising Prices When Times Are Tough

Let's talk about something that can be a bit tricky - raising prices when money is tight. The temptation is to hold off in case you lose sales. But if you don’t put up your prices you’ll soon go out of business and you’ll be letting down lots of your paying customers.

I bet that your suppliers have already put their prices up for you and then probably didn’t bat an eyelid!

Don't worry though, I've got some simple tips to help you navigate this challenge.

1. Evaluate Your Costs: First things first, take a good look at your costs. Are your expenses going up? Are you barely making ends meet with your current prices? If so, it might be time to consider a price increase. Just make sure you understand exactly how much you need to raise prices to cover your costs and make a profit.

Communicate Clearly

Nobody likes surprises, especially when it comes to money. If you're going to raise prices, be upfront and transparent about it. Give then fair warning. This will usually result in a spike in sales so factor this into your planning. People appreciate honesty and understanding.

Add Value

When you're raising prices, can you add value in other ways? It would be great to show your customers that they're getting something extra in return but that won’t always be the case. If you have made improvements to your product or service, offering better customer support, or throwing in some bonus features, then tell everyone! Whatever it is, make sure your customers feel like they're getting more bang for their buck.

Offer Options:

Not everyone is going to be thrilled about a price increase, and that's okay. To ease the blow, consider offering different pricing options to cater to different budgets. Maybe you can introduce a basic plan for those who want to save money or a premium plan for those who want all the bells and whistles.

Start Small

If you're worried about scaring off customers with a big price hike, start small. Incremental increases over time can be easier for customers to swallow than one big jump. Plus, it gives you a chance to test the waters and see how your customers react. My motto is little an often. If you are selling services challenge yourself to increase your price for every new customer and then pull up old customers to the new level.

Monitor Feedback

Once you've raised prices, keep an eye on how your customers are responding. Are they happy with the changes? Are they complaining or expressing concerns? Pay attention to their feedback and be willing to make adjustments if necessary.

Stay Flexible

Finally, remember that raising prices isn't set in stone. If you find that it's not working out as planned, don't be afraid to adjust your prices or try something different. Flexibility is key to adapting to changing circumstances.

Monthly Check Point

Pricing should always be on management’s agenda, especially now. In this current climate it should be discussed / reviewed monthly but certainly every 90 days as part of your re-forecast.

It might not be the easiest thing to do, but with a little planning and communication, you can make it work for both your business and your customers. Above all hold tight to the value that you bring to everyone, be that a great meal, a mood boosting haircut or a technical solution to a major problem.

Pricing should always be on the agenda, preferably monthly but certainly it should be a big part of your quarterly or 90 day review.