When is the best time to raise your prices?

When is the best time to raise your prices?

Ever been a little concerned about raising your prices?

I’ve worked with many business owners and successfully enabled them to raise their prices, often much to their surprise!

The key is to put yourself in your customer’s shoes and consider how they will likely perceive your price increase, rather than how you might happen to see it.

Often, I find business owners think that any increase above the rate of inflation will likely result in their customer thinking this is unreasonable and moving to another supplier.

But stop! How might you react if one of your suppliers announced a price increase? What thoughts go through your mind? What are your options?

When you stop to think about these questions, often the following considerations begin to come to mind, e.g.

  • Will another supplier provide as good a service/product as my existing supplier?
  • How do I feel about losing the relationship I currently enjoy?
  • In absolute terms, is the amount of the increase that material to me in my business, in other words, does it really make that much difference to me anyway?
  • Is looking around to find a replacement supplier more trouble than it’s worth?
  • Whilst the increase may in percentage terms be above inflation, how long is it since they last raised their price?

In short, your customer is likely to consider how much they value your service against how much you are planning to charge.

If they conclude that, actually, it’s still value for money, then why would they take on the hassle of looking for another supplier? 

Your price actually says a lot about the kind of business you run.

Remember the Stella advert from a few years ago?  They took a brave [but ultimately brilliant] decisions to position themselves at the top end of the beer market. Because who wants to drink cheap beer?

So, if you want to raise your prices, makes sure you consider the following:-

For existing clients, the choice of how, e.g. face to face, on the ‘phone, by email, by letter, etc., will depend on your view, knowing them as you do, as well as which method you would prefer if you were the recipient!

Why you are doing it, e.g. ‘over a year since you last did’ or ‘in order to be able to continue to provide the quality of service they have enjoyed to date, you need to keep up with the rising cost to attract and retain a top quality team’, etc.

When you are doing it – the date from which it will become effective.

How much – being the amount of the rise, preferably in absolute terms, rather than expressed as a percentage.

Good luck!

Photo by: https://www.flickr.com/photos/leejordan/

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