Talking with your customers about a price increase is not easy. They do not want to hear that the product their company relies on is going to cost more.
You likely will experience pushback from at least a few customers. This is why you should assure them that the price increase will help maintain the quality and value your product provides.
The following are five ways you can sell a price increase to your customers.
1. List the Reasons for the Price Increase
Understand why the price increase is necessary. This helps you build confidence to explain the reasoning to your customers.
Your customers are more likely to accept the price increase because you believe in the reasoning behind it. The more confidently you explain what led to the price increase, the less likely your customer will want to negotiate a discount.
2. Detail the Value of Your Product
Write down specific ways your product provides value for your customers. Use this information to clarify the need for the price increase.
Emphasize that the increase is required in order for your company to continue to deliver the level of quality and service the customer expects. This discourages your customer from pushing back about the price increase.
3. Prepare Materials Detailing Economic Trends
Bring to your meeting some materials detailing the economic trends of the past few years and the trends for the future. This is important if your business is subject to changes in the value of currency or commodity prices.
Having the materials with you can increase your confidence. Present this information only if absolutely necessary.
4. Be Ready to Handle Objections
Your customer may bring up service issues or other reasons why they believe your company should not be issuing a price increase. If so, acknowledge the issues that your company is dealing with. Then, explain how the lack of a price increase could result in the company having to make other changes that may impact its ability to make service improvements.
5. Create a Worksheet Minimizing the Impact
Show your customer how your company’s price increase takes up a very small part of the overall financial picture of the customer’s company. The key is to frame the increase against a large number and as long a timeframe as possible.
For instance, assume that your customer is a company that buys parts to make equipment. The component you sell them has a 5% cost increase. Since the component used to cost $500, the 5% increase of $25 raises the cost of the component to $525. If the component you sell your customer goes into equipment that they sell for $5,000, then the cost of the price increase is only .005% of the total price of the equipment.