As business owners, there are times when we feel as though our brands have reached that stage where a rise in the prices of its products is due. For whatever reason, you come to agree within yourself that your current price range is no longer commensurating well enough with the solutions you’re offering, and as such, there’s a need to up our prices. Maybe because the cost of materials and labor are rising, or perhaps because you want to generate more revenue, prove market dominance, affirm product superiority, or make more profits to settle any homeowner loans owed or any debt owed to the Wescot credit services. But regardless of what your reasons are, it is crucial that you understand that price increment is a very precarious move. And if executed properly, you stand a chance of achieving your goals, but if otherwise, then you risk alienating some, if not all, of your existing customers. To that effect, here are a few tips to guide you through the entire process without necessarily losing customers along the way.
Time it right
Before you proceed with your plans to increase the prices of your products or services, it is very crucial that you get the timing right. Failure to do so might result in more damage to your business than you may ever envisage. As a general rule, always study your customer base to understand their loyalty and interest level, as this will help you determine the appropriate time to drop the bombshell on them. Like we mentioned earlier, some entrepreneurs are just tired of turning to an IVA company for IVA advice whenever they run into a few glitches in their business, and as such they want to start turning enough profits to offset any effects that their debts and expenses might be having on their business, and to this effect, they turn to product price increment. This is not the best practice at all, because the timing of your motive shouldn’t be guided by your own personal agenda, rather by the satisfaction of your customers. In fact, the best time to raise prices is when you’re certain customers are absolutely satisfied with the solutions you’re offering. Remember, if your new price range doesn’t go well with them, they have no problem switching to your competitors.
The best way to convince consumers that they are getting enough value for their money is to add a little bit of extra. Customers are far more likely to accept higher prices if they’re getting something extra in the bargain. Humans, generally, dislike change, and the moment you’re trying to force a price change on them without adding any perk to it, they jump to the next brand.
Approaching the goal from another angle, why not try price reduction? I know I know I know, that sounds really counterintuitive. But do you know that you can actually make more profits by reducing the prices of your products? Yes, you can. In fact, restaurants and other brick and mortar store businesses have been using this tactic for years now. I know you’re already eager to know how the tactic works, just sit tight and read on. The tactic involves keeping the price points the same but reducing product sizes slightly so that customers don’t notice. You can use this tactic for almost any retail product, from food to cosmetics, fashion to groceries, and lots more. However, you need to exercise great caution because if customers notice, the tactic could backfire.
Offer discounts to cancel out the price increase
If you’re so eager to fund your prepaid funeral plan and resolve your Scottish trust deeds debt with profits made from product price increment, then you may want to go a bit scrupulous. Why? Because, as much as you want to shoot the prices up to generate your target profits, you also want to go in realistically. After all, there is no point in increasing prices if your customers won’t respond positively to it by making purchases. And to this effect, you may include some stellar discount offers and promotional deals – in your new price package – that brings prices down to their original values. The reason for this is that while some customers might be willing to keep up with the new prices, some might not, especially the price-conscious ones. So, to keep them, raise your prices, but offer occasional discounts.
Improve your services or products
Although I’ve placed this as the last on the list, it is still the most crucial tip. If you want to reach your target profit goal by increasing your product price, you must be ready to offer something extra in terms of the quality of your offerings. Like it or not, customers will be more willing to accept a price increase if it’s accompanied by improvements to your product or service. Remember, you had a certain standard before, and customers were happy to pay for that standard, if you now want them to pay a little extra, it is only logical that you need to prove to them that there’s an improvement in what you’re offering them.