The 'Why'

  Let’s talk about price conversations: how can you break the news to a customer that the price for your product/service is going to increase while:

1. 1. Keeping a good working relationship
2. 2. Preventing them from going to your competitor
3. 3. Maintain your contracts and renewals with them
4.  

  In this series, we’re going to cover the psychology of a price change as well as many strategies and tactics to keep your clients happy even in the face of bad news. 

  The most important, foundational aspect of the price change in explaining the ‘why’ of the price increase. At this point, people logically understand why you’re raising the prices on them. Emotionally, they might still be taken aback.

  Let’s say you have to tell a client that your prices are increasing on a product you manufacture. You could say something like this:

  “Mr. Customer, we pride ourselves in using the best material to deliver high-quality products. We’re raising our prices to be able to cover those costs while still maintaining high quality. We believe that a higher quality translates to lower ownership cost on to you.”

 

  Basically, you’re telling the client that you are raising the prices but it will benefit them in the long run. 

  For equipment costs:

  “As we move to become more efficient without sacrificing quality, we’re installing new equipment to improve our turnaround time to you and we’ll be able to increase our prices. Our goal is to get your products to you faster and meet your target goals or your end customer goals.”

  Notice how I always tie it back to how the end customer will be positively impacted in the long-run.

  For new hires:

“As demand from clients like you grows, we will be increasing our prices BUT I think you’re going to see a dramatic improvement in our ability to handle calls and be more responsive to your needs.”

   You’re highlighting that yes, prices are going up because of new machines, new equipment or new hires, but at the end of the day it will benefit them. If you talk about these points, they’ll be more accepting of price increases. 

Download the price increase template here and rewrite these scripts for your product or service