Into the Mailbox: Price Increases
Into the Mailbox: Price Increases
It took a full month in 2016 before this prompt came across my monitor: “Greg, talk to me about price increases. How do I do it without losing customers?”
(Last year it was the first week in January. You can see some of my pricing posts here: Chambers Pivot: Pricing)
I’ll keep it brief: Five things to consider.
- Start by segmenting customers into past, present, and future, and further segment current customers by annual revenue because price increases don’t impact everyone the same way.
- Planning the communication is the key. I suggest you use the marketing department to help you craft your segmented messages.
- With current customers, you will give them a reason for prices increasing, but most important, give them a date when the increase will affect them. I advise customers to give current customers a grace period where they continue to get preferred pricing, but let them know exactly when that ends.
- With past customers, communicating a price increase is an opportunity to revisit why they left. With current prospects it’s an opportunity for them to take advantage of the current grace period.
- Price increases don’t have to result in lost customers. Effectively communicating with them is the key, so use the best communicators you have in your company, who are usually hiding in marketing.
That’s it. Segment, plan, timing, prospect, use marketing staff.
Good stuff.