You’ve probably been in the situation before – you pop along to your local shop to pick up your regular weekly items and BAM, the price has gone up just like that! You scramble around the shelves hoping somebody has just made a mistake with the pricing tag gun but it’s to no avail. As a customer, price inflation can be a bitter pill to swallow so now it’s your turn to step into the shoes of small business owner, we’re here to help you keep your consumers sweet when you decide it’s time to increase your prices.
When starting up your brand new business venture, experts always advise aiming a little high when establishing your initial price points. Customers are far more likely to accept a reduction in prices further down the line than an inflation, so setting the bar high from the off will help you avoid any sticky situations and loss of consumer loyalty. However, if you do have to ramp up prices at any stage, the following pointers can help you make it easier on your customers.
Choose the right time – Asking your customers to fork out more money is always going to be a delicate situation that gives rise to a few hiccups but being considerate about when you do this can help diffuse any difficulties. For example, implement increased price changes during the Christmas season when consumers are more lenient with their spending and budgets.
Relaunch the goods – Altering the packaging of your products is a great way to be creative with the truth and apply your artistic license to distract the customer from the price increase Consumers will assume that this is a whole new product and will therefore not be as quick to protest against cost inflation.
Easy does it – There is split opinion over whether implementing one single price hike is less disruptive than introducing new costs gradually but most of us agree that the softly, softly approach is the best way forward. Staggering price increases over time or upping the costs one product at a time is a good way to keep customer dissatisfaction at bay. In fact, they might not even notice!
Make some reductions too – Where you can afford to, reduce the price of some less profitable products at the same time as increasing the cost of goods with higher margins. Push the promotion of your discounted products so the customer feels like they are getting a much fairer deal. Consumers go about their business saving money while you are allowed some wiggle room to push your profit margins. Win, win!
Provide a consolation prize – Informing customers that they need to start paying extra for your products can be a difficult and turbulent process but providing a little something extra can help take the edge off. You may wonder how supplying more can help you boost your revenue but selecting something of high value to customers that is of low cost production to you makes this possible. A period of free delivery or a temporary ‘buy one get one half price’ discount offer might be all it takes to jump smoothly over this costing hurdle.
If you’re starting up your own venture and have stumbled across this blog post through searching for some useful advice on prices, then you might also be interested in our pricing advice article, which you can find right here.