How to raise prices without scaring your customers

At some point, a business must increase the prices of its products and services. On the business owner’s part, he or she might be hesitant to make the move because customers might leave and look for a lower priced alternative. Raising prices is inevitable but there is a way to lessen the impact on your customers.

Why are your raising prices?

You must have a good reason to raise prices. Don’t just raise prices because you want to make more money. If your raw materials have raised prices then you must raise the prices of your end products as well. Another reason to raise prices is your product support. If you are seeing that you are no longer profiting from these added costs, then you must start to raise prices. Always have a credible reason to raise prices so that your customers will be able to understand the move.

Warn your customers

Facebook, Twitter and your blog are good avenues to start communicating with your customers. Inform them of what’s going on with the company, its processes, etc. and start readying them for an increase in prices. Inform your customers several months beforehand, if you can, about the change in prices. Explain what’s going on in your company and encourage your customers to give their opinions about the issue.

Appreciate your existing customers

Give your loyal customers something. Don’t forget that they helped you get where you are. Give them special discounts and special offers to show them that you appreciate their loyalty. You can just charge the difference to your new customers so you only have to raise the price slightly for the old ones. Give them time to adjust. If you have explained your side well, your old customers will appreciate the gesture and support you even after the offer expires; this helps keep sales forecasts strong.

Provide more value

Surely there are other areas in your business that you can improve on such as customer service. If it takes you a day or two to answer queries, try to improve your system and make it within 24 hours. You can also provide your customers with more useful information through your blogs. It doesn’t always have to be about your company or products. For example, if your product is a cleaning product, write blog posts about how to remove tough stains or tough dirt or how to make cleaning easier or how to get kids involved in the cleaning process.

Increasing prices is a natural thing that every business must go through. The main point is to get your customers ready for the big change.

Manage your sales cycle with Sykes fulfillment. Visit sykes-gala.com to learn more.

How businesses might handle unsatisfied customers

Handling customers canceling services is an opportunity to improve sales and business operations. As soon as a manager sees the numbers on cancellations, or hears about them action should be taken to 1) limit cancellations, 2) turn cancellations into marketing feedback, 3) improve business operations and sales and 4) rebuild client relationships. In order to do this well, it is important to know how to handle customers canceling services. A few techniques to handle customers who cancel services and improve sales are outlined as follows with details about how to implement them and why they work.

Fill the sales vacuum

A sales vacuum is created when the customer's service cancellation is simply honored with indifference. To fill that sales vacuum, ask the customer the reason for cancellation and provide a courteous response tailored to their feedback. For example, if the customer is unhappy with service, ask if they would like a different in house service technician, discount, free month of service etc. This fills the sales vacuum with ideas the customer may appreciate more and possibly even allow them to rethink their decision.

Obtain valuable feedback

Feedback from customers that cancel services is worth money because the same feedback would cost money to attain independently through a marketing research study. Asking a couple of pointed questions when receiving a cancellation request can help the sales person or company build an information database with which to develop new sales and operational strategies. Feedback can identify possible problems with a service, and/or useful information about the clients that cancel.

Offer an alternative

If an appealing enough alternative is offered to a client who is canceling a service, they may reconsider. Even if it means less money for the company, less money and one less cancellation is better than no money and one less client especially if there are sales and client retention benchmarks to be met. Alternatives depend on the specific reasons for the cancellation, the type of business product or service and the client's interests.

Salvage brand equity

The cancellation of service accounts is the last chance a salesperson or company may have to interact with a customer directly. Staying professional and fulfilling the customer's requests, cross selling, and implementation of cancellation programs specifically designed for service cancellations can all be helpful in salvaging brand equity. One unhappy former client could tell all their friends about "that terrible service they got from a salesperson at XYZ company", or how "that service plan is so overpriced", etc. If the customer cancels feeling good about the cancellation with the salesperson or company that's better for the service than a bad felling.

Design a cancellation process

A cancellation process implements the above techniques systematically and usefully. For example, a cancellation process may consist of a series of steps. Each of those steps follows a methodology designed to optimize the experience for the salesperson, client and company for the purposes of client retention, marketing, customer satisfaction and improving sales and operations.

1. Receive cancellation request either by phone, email, fax, mail or in person
2. Initiate and engage customer in conversation
3. Obtain marketing feedback: Inquire about reason for cancellation
4. Fill sales vacuum: Offer response based on the reason(s)
5. Salvage brand equity: Leave customer feeling good

Re-build customer lifetime value

A customer that has canceled may reconsider a service in the future if it has improved, a problem has been solved or the reason for the cancellation has been resolved. This is why it is important to leave the customer feeling happy after the cancellation i.e. it may open the door to further opportunity in the future such as reinstating the former customer's service agreement.

After a short time has passed, contact the client one more time with a new offer, hand signed letter from the company's management or salesperson, and an appreciation for the opportunity to provide service in the past. This allows the sales person, company and client one more chance to achieve customer satisfaction, re-build customer lifetime value and improve company marketing asset value.