Price Increases: It’s All in the Preparation
Depending on the industry that you participate in, increasing prices may be an annual part of the industry culture or it may not. Some industries increase prices on a consistent annual basis.
These pricing strategies actually train the buyer to accept increases and reduce the push back seen in industries that change price infrequently.
The key to getting customers to accept increases lies in the preparation. Here are a few helpful hints from the pricing consultants at PricePoint Partners to making your price increase go smoothly.
- If you are raising prices due to cost increases, be prepared to share your actual cost increases with the customer. However, only use this data if necessary. Present supporting cost data only after the buyer has resisted the increase.
- Be sure that your sales team is well prepared for price negotiations. Equip them with several backup strategies in the event of buyer push back. If the buyer resists, consider deferring the increase for 30 days. Or, removing something from the deliverable that reduces the value of the product. Sales professionals will present price increases with confidence when they know they have a strong back up plan.
- Customers don’t like surprises. Let them know that an increase is coming. This will make the announcement more palatable.
- Practice your price increase presentation with smaller customers first. This gives you the chance to practice and develops confidence when it’s time to present to your biggest customers.
As in any competition, preparation is the key to getting the very best results. Take it from the pricing experts at PricePoint Partners, spend the extra time to prepare for price increases, and you will see your net realized increase improve.