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Pumping Up Prices
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Article 5: How Not To Approach Clients
When you raise your prices, don’t aggravate an already touchy situation by doing something wrong. Avoid these seven missteps.
1. You can do many things wrong when raising prices, such as raising them more than necessary or raising them too frequently. In both cases, you show disrespect for your buyers. You also rely on customers to be understanding and tolerant while you squeeze every dime out of the sale.
These are not tactics that win long-term, loyal customers. Rather, they build resentment. And every customer has a resentment threshold.
2. The most egregious faux pas you can commit is to treat customers as if they don’t matter. If higher prices weren’t bad enough news, higher prices accompanied by an arrogant take-it-or-leave-it attitude are worse yet. Acting as if you take your buyers for granted is the quickest way to alienate them – and to lose them.
3. It’s not necessary to apologize for price hikes. But raising prices without even bothering to explain the reason is presumptuous. It signals indifference, even arrogance. These are not traits you want coming to mind when customers think of you.
4. Don’t compound the bad news. If you must raise prices, don’t shrink value at the same time. If your six-pack of widgets increases from $2 to $2.25, don’t add insult to injury by simultaneously reducing the six-pack to a five-pack.
5. Don’t surprise your customers with unannounced price hikes. This is particularly troublesome in the case of long-time buyers and those whose periodic orders are filled automatically. They should not discover for the first time when the invoice arrives in the mail that you are charging 10 percent more.
6. Don’t forget to point out the benefit to the buyer for paying the higher price.
It’s not enough simply to excuse away the price increase. If you don’t take the opportunity to remind the buyer of the benefit (preferably a new benefit) for buying your product, you have missed the best opportunity to offset the bad news while it’s still fresh in the buyer’s mind.
7. Don’t ignore customers’ instructions. If you periodically survey customers to gauge their attitudes toward higher prices, don’t fly in the face of the poll’s results. If you are going to bother to find out customer preferences, pay attention to them and make the appropriate adjustments.
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