Price Increases: Advanced Notice or Not?
When distributors are planning price increases should they provide an advanced notice to their customers as part of their overall pricing strategy?
In most cases, the distributor pricing strategists at Price Point Partners find that an informal communication to your biggest and best customers helps the increase discussion go more smoothly.
Consider a verbal “heads-up” that your company is planning an increase 30 days in advance of the formal announcement. No specific details need to be presented or discussed. Simply mentioning that an increase within a certain range is coming goes a long way to getting the OK later on.
Some sales professionals believe that an advanced notice only gives buyers time to find alternative sources. We find this not to be true. Buyers are faced with price increases on a regular basis. And, many buyers are more concerned about selling the price increase to their management. Giving them some time and detailed information supporting the increase helps the buyer resolve any internal issues.
Of course, not all customers need the advanced notice. Save this only for your big accounts. Small accounts can be addressed at the time of the formal announcement and most can be addressed in writing.