How to handle Prices Rises with your Customers and Sales Staff.....
- waynefarran
- May 13, 2014
- 2 min read
Let’s face it, from time to time the cost of business will increase due to numerous factors including but not limited to; international exchange rates, freight & logistics costs, or even the costs of manufacture passed on by your supplier.
It's fair to say that our customers also experience similar impacts to their bottom line. So when it comes time to raise pricing it needs to be handled carefully and communicated both internally and externally to the best extent that it can be.
Recently I had to deliver the news of an impending price rise to my customers and sales staff; I used logical explanations that both my customers and staff could understand and rationalise.
Below are several things that I consider when addressing the issue.
1) Develop a strategy.
Is a blanket price increase required across all products/services, or only on part of the range/service? I also consider if I need to raise prices incrementally or all at once to get to the desired price/margin. In addition I consider what is the most acceptable to my customers.
2) Timing.
When possible I try to give as much forward notice as I can. This to some extent helps to absorb the impact of the news. If you can give enough lead time to the price increase you may even be able to increase sales in the short term by using a so called "Buy Now" beat the price increase rational.
3) Staff buy-in.
All Staff being internal and external sales staff should understand the reason for the price increases. They need to be comfortable and additionally understand the reasoning so they can talk to their customers and give adequate explanations.
4) Be transparent in relation to the reason for the increase.
If your customers understand the reasoning for the increase it may be more palatable for them; especially if you have incurred increased costs from third parties.
5) Consider a long term sales offer.
Now that prices have increased, it may be a viable sales option to offer your customers a discount structure on the new price moving forward on Quantity Buys or Forward Orders, securing increased business over the long term.
Some food for thought.
Wayne~
