How To Tell Clients You’re Raising Your Prices
/It can be scary to tell clients you’re raising your prices. Every fear you can imagine flashes before your eyes - over and over. Are you going to lose your best clients? Are clients going to leave en masse forcing you to lay off employees… or worse (is there worse)? As with most difficult conversations, what actually happens is not even close to as bad as our imaginations, especially if we approach the conversation with thoughtfulness and planning.
For the record there are many ways for you to introduce new pricing. While you can do an across-the-board price increase, you may also:
Stagger your roll-out by province, country or by industry sector
Introduce new pricing when a contract anniversary date or annual review happens
Do a partial roll-out now and a full roll-out next year
However you choose to do it, your best approach is to do it thoughtfully and to prepare. This means getting your Marketing and PR channels working long in advance on messaging and working with your Sales Professionals and Customer Service Representatives to train them on best-practices and key messages (but i’m already getting into point 2 and 3 below). So let’s not waste any more time.
Here are 8 ways you can help you tell your clients you’re raising your pricing:
Deliver Quality
Be sure you deliver competitive, value-add to your clients.
Manage Expectations
Don’t surprise them. They have to plan / budget for price increases just like you do. One way to not surprise them is to make price reviews and adjustments part of their anticipated schedule right from the start of our B2B relationship. Help them expect the possibility 3-6 months in advance if you can.
Another way to manage expectations is to involve your Marketing & PR departments to release / re-distribute industry related articles to the ‘public’ and or to your clients through association newsletters. Other options you could use to regularly put out information to the public… and therefore your clients include:
Twitter
LinekedIn
Your Website / Blog
Your Monthly Client Newsletter
Industry Magazine Articles
Prepare Your Team / Involve Your Team
Involve your team in planning and the messaging; after all it will likely be them that will be using it. Getting input from everyone on the team can make sure you don't overlook a key message and can help fine-tune the message they will have to use… in their own voice… based on their position (Sales versus Customer Service for example). Getting your team involved also helps secure buy-in on the approach and helps get everyone aligned and invested in striving for a positive outcome.
Be Honest. Be Confident
Both you and your clients have to believe your product / service is worth every penny (or nickel I suppose in Canada). When it’s time to share new pricing, have a face-to-face conversation if possible. Don't try to hide the price increase or wait until last minute to let them know. When you connect with them your message should confidently include three points:
We value your business.
You’ll get something out of it (greater value, greater service and/or lower risk).
As always we give you choice (see point 7).
Share What They Will Gain
Price increases have to be all about them and what they will gain… not about you and what you deliver. Focus on what benefits your clients will receive from your services - such as additional service or support, extra resources, increased availability, shorter turnaround. Along with new features, share services you’ve always delivered but they’ve never needed or use… because now might be the time for them. If you are introducing new services or features, explain how they will benefit them. Remember, faster service, reduced risk and greater security are important clients benefits.
Make sure they understand why your pricing is going up and why your product / service is worth more.Remind Them How You Do & Have Added Value
Remind them about how you / your organization have helped them in the past. This doesn’t have to be extensive – just a high-level overview of big things like how you’ve saved them money, reduced their risk, helped find new clients or enter new markets.
Offer Choice
People love choice – it empowers us and helps us feel in control.
Raising your prices may help your clients justify moving to a bigger even more expensive package, or it may give them the opportunity to stop paying for a service they no longer use – like out of date reports.
When going in with a price increase consider presenting new solutions and/or new tiers (higher and lower), they could choose. This reinforces the approach where you and they focus on value rather than price.
Don’t apologize
From time to time clients should expect a price increase. Every successful business gets better year-over-year, so your offer should be getting better, constantly adapting and delivering more of what your clients need. As long as you are proving value you should feel confident. In the same vein, never blame inflation; that is your business cost, not theirs. Sure it will be part of the increase, but if you are only raising price because of inflation you are missing opportunities… and perhaps not improving your business.
One last thing; you may not want to raise your prices to everyone at once. For example, you may want to raise your prices with new client and give your existing clients time to transition to the new rates. This could have some helpful ‘image’ and ‘message delivery’ benefits as you explain to existing clients that they have had a grace period… because you value their relationship so much. And, there is a side benefit to you as this approach allows you to ‘test’ your new pricing before a full roll-out.
Conclusion
If you have been a great supplier and delivered top quality products / services… and have built a relationship where you’ve listened to their needs, you are an asset to you clients and they’ll want to keep you. Also, clients are risk averse and moving is not so easy, especially for large clients / large businesses.
Make sure you are offering great value long before your price increase and then make a plan. If you are positioned well in the market you may lose one or two clients, but if they are that price sensitive, it might be best that they are gone and free up your time for even better, more profitable clients.
About Bruce and Bruce Mayhew Consulting.
Corporate trainer Bruce Mayhew (of BMC) specialize in customized Leadership, Communication and other soft skills training solutions in Toronto and across Canada.
BMC helps your greatest assets think productive and be productive.
Bruce is an experienced motivational speaker in Toronto and has inspired audiences across Canada and within the USA and the UK. Bruce works hard to always make sure your training event, conference, retreat, or annual general meeting is a success.
