Announcing a price increase to customers is something that every technology reseller has had to handle from time to time.
There are different reasons for raising prices; some of those may include:
• Need to meet rising overheads such as higher wages, supplier fees & improvements to software.
• Weren’t charging enough initially, perhaps because they were new and kept prices low to win their first customers
• Found out competitors are charging more for similar services
• Customer is still using old services, resulting in a higher cost to support/maintain.
Regardless of the reason, the customer will still see this as a price increase. We’ve examined the critical considerations in announcing a price increase.
Communicate with your team first
Increasing customers’ bills will impact every team within your business, whether directly or indirectly.
So, make sure that everyone in your business knows how to explain the price increase to customers; mainly, your customer service team needs to know how to answer questions, but your marketing and sales teams will need to understand how to explain the new pricing to existing clients and sell it to new customers.
Don’t beat around the bush
It’s unfair to make customers read through a vast email to learn about a price increase.
It’s better to be upfront about it in the first few sentences rather than bury it at the bottom of a message. For two reasons:
1. If you waste too much time on fluff, your customer will see straight through it and miss why you are doing this increase.
2. Your customer may miss it and then receive an increased bill unexpectedly.
It’s best to get to the point quickly – tell them how much their prices will be going up and when this takes effect. If they want to read the whole email and find out more, they can.
Call all VIP clients before sending an email
Your best customers will more than likely appreciate you taking the time to personally call them about a price increase more than they would if the same information was provided via a generic email.
Or if they are an essential customer, is the price increase something you can exclude them from.
Try multiple times
You don’t just have to use the free methods of communication to announce a price increase so that customers don’t miss the announcement. One practical use of communication would be direct mail.
Timing
Most of your contracts will state that you must give a 30-day notice period, but it’s best to provide a lead time for the price increase.
Don’t forget the value you offer
No matter how much lead time and transparency you provide about a price increase, there may be customers who choose to seek a cheaper service.
If you’re doing your job well, replacing you with a cheaper competitor could backfire for them. The service level could drop & if it’s a genuine reason for a price increase, then it’s a good chance the competitor they are moving to will increase their prices in a few years.
Be Thankful, Not Sorry
Sorry means that you have done something wrong when doing something right for your business and potentially theirs in the long run. Tell customers you would never have come this far without them and that you look forward to helping them achieve even more.
It’s only natural for you to feel guilty or concerned about increasing prices, but you shouldn’t be.
Don’t be apologetic about it, and don’t make it a bigger deal than it is. Costs increase over time, and you deserve to be compensated for the value you’re bringing to customers.
Summary
Partnering with Candio will give you access to a range of self-service products designed to help small to medium businesses increase their online visibility whilst increasing your monthly recurring revenue. Instead of just simply uplifting customers bills by a %, Candio has worked with technology resellers to deliver a price increase with a service at the same time. Candio will operate your business to educate your team on how the price increase works, features and benefits of the new product, deliver your customers a 60-day trial and notify them at the same time either via email or direct mail. Head over to our get in touch page to find out more about Candio & our digital services.
If you’d like to learn more about becoming a Candio partner, click here to arrange a meeting with our BDM, Tom Chedham.
