If you want to run a successful business you have to be prepared to put your prices up regularly. Unfortunately not every business owner is good at this, in fact most are terrible. We live with the fear that if we put up prices we will lose all of our customers. If this is the case, you've got big problems brewing.
The reality is that it's all about how we put up our prices and when we put up our prices. Some of the biggest mistakes businesses make when it comes to putting up prices:
PUTTING PRICES UP IN A BIG CHUNK AS OPPOSED TO SMALLER AMOUNTS MORE OFTEN
Rather than putting up prices in small increments regularly, as in every 12 months, they keep their prices the same for years, then get frustrated and increase their prices with little to no warning by a large amount (like twenty percent). The customers are shocked and start to resent the business and many leave. To them it doesn't matter that the prices haven't gone up for a few years, they don't look at that as justification to increase prices by a big chunk, they just look at this as bad business.
NOT EXPLAINING WHY THE PRICES ARE GOING UP
This is another big and common mistake, putting up prices without any warning or explanation, or even sharing a narrative to really let the customers know why prices have been put up. We need to give our customers warning, explain why the prices are going up and most importantly what is in it for them. If you can't give your customers the benefit to them as a result of the new prices, you probably can't justify putting them up.
A LACK OF ONGOING MARKETING TO EXISTING CUSTOMERS
This really means taking your existing customers for granted and not doing much to build engagement. These businesses don't explain how they are growing, the new things they are doing, the milestones being reached by the business, plans for the future and other relevant news to keep their customers engaged and feeling like they are getting value for money. Instead, the customers are just charged more, often with no warning and they feel a little betrayed and more motivated to find someone else to buy from.
I honestly think that we need to get much better at putting our prices up. The bottom lines is simple:
- Keep your customers engaged all the time not just when you are trying to sell them something.
- Increases your prices in small increments often (yearly) as opposed to big increases every few years.
- Take the time to really explain why you are putting up your prices and the benefits to the customer.
- Keep growing and offer more value and tell your customers what innovative things you are doing and why you are doing them?
- Don't get in your head and start saying things like "my customers won't be able to afford this". It's rarely true, but our poverty mentality kicks in and costs us a lot of money.
At the same time, we can get creative with putting prices up. A friend of mine told me about a restaurant where they put their prices up one dish up at a time over the space of a year. This makes the price increase hardly noticeable and certainly more manageable and their customers remain deeply engaged and loyal.
Putting our prices up is an integral part of any business. If we aren't good at it, it's going to cause us problems at some stage. Deliver great products and services, charge what they are worth, proudly, and find the right people who are prepared to pay you for the quality you deliver.