Questions

I have an established service/business I have been running for years, and I am considered an expert in my field. I am rebuilding our very old site, which will have many new features and a membership aspect. Unfortunately, my pricing has remained the same over the last several years, and I have always given away more for free than I should have from a business standpoint. I want to make this a viable business model and compensate myself for the time I pour into it. The new site launch brings so much to the table, but it will also cost more to maintain. How do I raise my prices without losing my customers? How do I price our new products without pricing them out? There is no one else who provides this local service.

To raise your prices without losing customers keep the following things in mind:
The best time to raise prices is when you are sure customers are satisfied with your product or service. Consider what you could throw in with your current product or service that would cost you little or nothing but would have higher perceived value to the customer. You can do this for almost any retail product, from cosmetics to candles. However, if customers do notice, this tactic can backfire. You can avoid raising prices on your actual product or service by adding fees. Utility companies do this all the time, and many smaller businesses used the tactic when gas and electricity prices soared a few years ago. Better quality fabric in the clothing you manufacture, new menu items in your restaurant or even new packaging for your product can help justify a price increase. Offer discounts to cancel out the price increase. When you raise prices, you may lose very price-conscious customers. To keep some of them, raise your prices, but offer occasional discounts and deals that bring prices down to their original levels. While frugal customers will use these discounts, less frugal customers probably will not bother, so you’ll still get plenty of people paying full price, while keeping your bargain shoppers happy. Bundle products or services.

Soften the pain of price increases by offering new bundles of products or services. For instance, if you own a nail salon and need to raise the price of your manicures, pedicures and foot massages, add a bundled mani/pedi/foot massage service in which each of the services is offered at a discount compared to its a la carte price. Target a different customer base. If you need to raise prices drastically, you may need to go after a new, more affluent customer base.

Even if your price increase is modest, expanding your target market a bit to more upscale customers or businesses with bigger budgets can be a smart way to offset the customers you may lose. If your business is service-based, such as a B2B company, lawn-care business or cleaning service, your customers expect price increases from time to time. If your services are provided on a month-to-month basis, offering a six-month or year-long contract at a lower cost than the month-to-month rate is a good way to lock in customers who want to avoid the price increase. You cannot keep all your customers happy, and when you raise prices, you are bound to upset some of them.

Be prepared to explain why you are increasing prices, both in person and on social media if customers complain there. Raising prices may not be easy, but these tactics can make it as painless as possible for you and your customers.
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Answered 3 years ago

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