One of the hardest things to do for businesses (even professionals) is to raise their product or service prices. Even established companies are reluctant to do it. Why? Because no one would like to surprise their loyal clients with a 5% or more increase on their bill.
Once a client has agreed to pay a certain amount it will be hard to convince him/her to pay more.
But what would you do if your business is affected by the increase in the rate of inflation, an increase in the cost of doing business, or an increase on how much your competitors charge?
No matter how much you want to avoid increasing your rate for the sake of keeping your clients happy, you just can’t. Because eventually, your business will suffer.
So if your business is affected by the increase in inflation, it is time to let your clients know that you will be raising your fees in a reasonable amount. It’s difficult to do, but you have to do it.
And here are some tips on how to avoid losing clients or making them upset when you are about to raise your fees.
1. Inform them beforehand
Don’t surprise your clients by giving them their bill with your increased fees. Make sure to inform them beforehand that you have decided to increase your service prices due to unexpected and unavoidable reasons, like the inflation and market competition.
No one wants to be surprised with an increased bill. So don’t further upset them by not informing them beforehand.
2. Communicate properly
Expect that your clients will get mad with your price changes. Communication is key. You need to communicate with them why they are paying more than usual. Don’t just add your additional fees on their next billing without even knowing that you have increased your rates.
Don’t email them. Chances are, it will be ignored. And it will give an impression that you are not making an effort to communicate to them properly why you are doing the increase.
You may email them to make a follow up after you talked to them in person.
3. Talk to them over the phone or in person
Call them or if you have a monthly meeting with them, try to include it in your meeting and explain how this will impact your business and their business. This way, clients will have a better understanding of what is happening and they might also consider increasing their product or service prices as inflation affects everybody.
4. Mention your competitor
Explain the current situation of your competitors. Mention to your client that your competitors are charging way more than your company. This way, your clients will understand why you need to increase your service rates.
5. Offer some discounts
If you can offer some discounts on your services in line with your increase, then do so. If you are having a 30% increase, offer your loyal client a 20% or 10% increase instead. This way you are getting the increase rate that you need and your client will feel that they are getting a great deal out of it.
It is really difficult to increase prices. But it is necessary and inevitable, especially with the changing status of the economy. One best advice that we can give aside from all of this is that, raise your fees high enough that you won’t need to raise again should another inflation occurs.
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