To raise or not to raise your prices, that is the question – and a hard one to answer it is!
Let’s walk through the process and discover how you can raise your prices successfully without doing damage to your business and customer base.
An important consideration when raising your prices is timing.
Is your business seasonal (holidays or tax season)? Raising prices just prior to the season garners less notice than other times of the year.
Does your business operate in an identifiable sales cycle (new model year)? When demand is high is the time to raise prices, reasonably, of course.
Are you experiencing growth? As you are gaining a new share of the marketplace, this is the time you may want to actually delay your price increase.
These need to be considered in order to choose your timing wisely and to alleviate conflict with and resistance from your customers.
Once you have carefully considered your timing, you’ll need to decide how much you want to increase your prices.
Though large price increases happen, the best way to raise your prices or fees is slowly, but regularly, over time. Your customers will offer less resistance, accepting the change easily. Often smaller prices increases may even go unnoticed among customers who would likely be repulsed by a massive one-time increase.
Finally, remember you are in business to make money and grow your business. Your prices are tied directly to the value that your customer recognises in your service or your product.
When considering price increases, will you be changing the value of what you provide, or will you be merely changing the price? Generally an increase in both price and value is the most successful approach. The idea is always to charge what your product or service is worth; undervaluing your goods or services and yourself will never give you or your business the success you desire.