The Raising of Prices

“If you've got the power to raise prices without losing business to a competitor, you've got a very good business. And if you have to have a prayer session before .
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Explain to your customers why you are raising your prices and how you are using the additional funds they will be paying each month. If your own expenses are going up, then explain to your customers why that is happening. If you are spending more money on your product, then explain to your customers how the additional features will benefit them. Add Features When you add a value feature to your tool, it gives you a reason to review pricing with your clients. Early customers will understand that they joined you at the beginning stages of your product and that with the product's improvement and growing feature set, the pricing may change.

Raising Prices Without Customer Backlash (8 Tips and Examples)

A new feature is a good reason to revisit deal terms. Give a Lower-Priced Option Let customers focus on value by giving them a second, lesser-priced option. Then there's a decision to be made, which focuses on the value that the product sets rather than the price increase. This is especially helpful if the lower plan is a little less expensive than what the customer currently pays. Over-Deliver First Be sure you can demonstrate that the value you provide is increasing more than the price.

Sure, a price increase might feel like a bitter pill to swallow

This way, customers know that they're still getting a good deal. As a rule of thumb, over-deliver and really impress your customers for at least days before communicating a price increase. Add More Value It's important to add more value to sweeten the deal. Your product should always be improving, but it's simply counterintuitive for somebody to pay more for the same thing they got for less before.

Justify the price increase by adding features or providing some other type of added value. However, it's essential that customers don't think that you're doing so just because you want a better profit margin.

1. Add other options at different price points

Another, easier way to raise your perceived value? Or maybe your widget has a fast-start training course… that alone could be worth a lot to your customers. Pull out and highlight all the features and benefits of your product. Then, use the added value as your reasons when raising prices. This positions you as someone who cares about your customers.


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Plus, it helps them get over your price increase and may even increase their loyalty to you. One industry using the power of this pricing strategy is electric companies. Electric prices go up and down unpredictably. To do this, offer existing customers the current rate for a specified amount of time. Some companies offer locked in prices for life!

8 Tips for Raising Prices Without Losing Customers

If you have a company that gets a lot of media attention—or has a strong following from a loyal customer base—be sure to announce your price change first. Doing this gives you the ability to get ahead of customer service and public opinion issues that could arise. Instead, be up-front and honest. See how they explained the price increase as necessary to continue providing the quality people are used to? Also, the timing of your announcement is important.

You want to let current customers know ahead of time, so remember to announce your price increase shortly before it goes into effect. A few days should be plenty for customers to feel informed. They did this to beat out their competitors, but after they had everyone signed up—cheaply and happily—they pulled the plug on a major part of their business plan…. Almost immediately, they lost , paying customers.

Plus, their stock took a significant dive. The Facebook page below was a common sentiment among their once-loyal customer base:. As you may have guessed, low-price strategies work to find customers.


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But retention, when raising prices, will likely be low as well. Instead, start with prices you can profit from. Then when you do have to raise prices, consider locking existing customers in at their current price as discussed above. Another example of a low-cost strategy is Fiverr.

I once hired a banjo player from Fiverr to make a birthday video for my husband.


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My husband and I run an e-retail site called ComfyEarrings. Since we started in , shipping and manufacturing costs have increased significantly. For example, in and we offered free shipping anywhere in the world.

1. You want to grow your business, not just win new customers

But, when international shipping rates more than doubled overnight, our profit margin on those orders disappeared. Later, when shipping prices increased again, we were forced to raise prices again. Finally, if all else fails, try raising prices gradually. Because one upset person tweeting about your price increase could quickly turn into hundreds of upset customers chiming in.

Just look at the Netflix example above. One company who successfully raises prices again and again is coffee chain giant, Starbucks.

8 Tips for Raising Prices Without Customer Backlash

Last year they raised the price of their packaged coffee 17 percent in their cafes and 12 percent in grocery chains. The reason they can do this is likely because their higher-end consumer base is less sensitive to price increases. Also, they have their consumer base hooked on their product. For many people caffeine is their drug of choice. To effectively increase your prices gradually, raise them as little as possible each time and try not to raise them too often. Have you increased your prices with good results?

Or, if you have questions about any of these techniques, please comment below. Christina Gillick is a direct-response copywriter. She helps her clients create loyal customers and raving fans through relationship building copy and marketing. Please join the conversation!