Raising the cost of goods and services is not a whim, but a forced measure. Let’s find out how to raise prices correctly, so as not to lose customers or quickly find new ones.
Why do you have to raise prices?
Otherwise, you’ll be working at a loss. Everything is always more expensive. Imagine: you raise wages, employees begin to pay more money for the delivery, laying more budget for advertising. And if you leave product prices unchanged, you’ll just recoup the cost of production or go into a lot of debt.
Constant price increases are an integral part of the Russian economy. And the rise in the price of some goods entails the rise in the price of others.
For example, just since the beginning of 2022, the prices of building materials have risen by 20-25%. If you are engaged in construction and repair, it is no longer possible to close projects at the previous prices.
Gasoline is constantly rising in price, just like any other fuel. This means that the transportation company today will not agree to carry a load for the notional $ 500, as yesterday. You will have to spend more money to bring the goods to the warehouse. Count the cost of the product: when fuel prices go up, it goes up too.
Even the Internet advertising market is growing and will continue to grow, according to expert forecasts. This means that there will be more competition, and you will have to spend more money to attract customers. Even now users are developing banner blindness: it is difficult to entice simple creatives, you have to try different channels and methods of promotion.
A few tips on how to raise prices so that customers don’t scatter
Prices will have to rise anyway. The question is how to do it correctly. You can not sell goods today for 15$, and tomorrow change the price to 15$ and continue to work: this will cause an outflow of regular customers. They will go where it is cheaper – to competitors. To prevent a sharp drop in sales, use price optimization models.
Increase prices gradually
Smooth price increases usually cause less negativity; people see the cost going up everywhere. You, too, can warn of the coming smooth change in price and earn a reputation as an open company that can be trusted.
This method works if the cost of the product also increases gradually. When the cost jumps by 10-15% you can also use this tactic, but then you have to work at a loss for some time.
Add something useful for free
In the market, there is a stall with fruits and vegetables. Products in it cost no less than 20$. It’s more expensive than in neighboring stalls, but still, there is a queue. This is because the saleswoman Maria gives each customer something for free: an apple, a pear, a bundle of herbs. The psychology of customers is such that most of them will buy at this stall, even if the one next door is really cheaper.
You can raise the prices, but add something useful and free to the product. Free shipping or packaging isn’t it: you need a chip your competitors don’t have. For example:
- a new soap sample from a handmade soap seller;
- three free lessons from another course with the purchase of a basic course;
- consultation from a specialist when buying access to the service.
You can make different variants of gifts – offer bonuses depending on the amount of the order or purchased goods. The main thing is that the gift should not cost the company too much, and the net profit should remain.
If you still have to raise prices, make the cost increase as painless and imperceptible to customers or explain to them that now the product works better. Some customers will leave anyway, but most of them will stay. And new ones will come, so you won’t lose anything and will be able to continue working with the new prices.