There comes a time when every business needs to seriously consider raising its prices in order to become more profitable, or even to stay afloat. There are so many reasons why a business might need to increase its prices, like inflation, increased rent, higher staff wages or increasing costs of materials. Many business owners worry that increasing prices will decrease sales, upset current clients or dissuade potential new customers from choosing them. However, this doesn’t have to be the case! Here are a few expert tips for increasing your prices without affecting your profitability.
Look at competitor pricing
Before you start changing your pricing you need to check out how much your competitors are charging and how you want to position yourself in the market. Have a look at the products and services your competitors offer and see whether you have room to increase your prices in line with how much they charge. Think about how you compare and what you can offer that they can’t.
Don’t look cheap
Some businesses find that when they increase their prices, they actually see their customer numbers increase. If you are selling a premium product, your price should reflect that as customers use prices to estimate value. If you’re selling bespoke website development and design that is cheaper than standard template designs, you might need to consider raising your prices. Customers might think there is a reason your service is so cheap and assume it is of a lower quality or you lack experience.
Raise your game
If you are increasing prices to make your business more viable, you need to make sure your customers get what they pay for. Try and improve your customer experience wherever possible, from providing a range of payment plan options and add-ons to always phoning back if you have missed a call.
Be honest with customers
Don’t try and cover up any price changes, be open and honest with your customers and explain why you’re increasing your prices. Loyal customers will be more than happy to support you, and those that aren’t impressed would probably have found fault anyway.
Are you looking for help to make your company more viable? Contact us at Highwoods & Associates today for accountancy, taxation and business coaching services.