Wed 18 Feb 2009
How to Raise Prices and Keep Your Clients
Whether you run a small business that sells products or services, there will come a time when you consider raising your prices.
Aside from increasing your customer base, it is the best way to increase the profits coming in.
Raising prices, though, is a risky step for any small business. Customers and clients are more sensitive than ever about products and services that they pay for, and you may have to prepare for a bit of a backlash in terms of support.
Just how big that backlash is will be determined by the preparation you put in before raising prices.
Let's take a look at a couple ways you can make this step as painless as possible.
Before you raise your prices, you may want to test the new prices out before you hit the market with them.
One good way to do this is to put higher prices on products you put out for new customers or clients. If you run a service based business, for example, you might want to raise your quotes when potential clients ask what you charge.
If acceptance seems to be easy, then the new prices are probably quite reasonable.
Explain the Changes
If you do find that the price testing goes smoothly, you will probably want to raise them across the board.
If you do, remember to explain to existing clients and customers why you did so. Odds are that if you are still attracting new business with higher prices, your services or products are worth it.
The key to raising prices is making the changes slowly and in an informed manner.
No one likes to see the cost of goods and services go up, but you can minimize the backlash (or at least be prepared for it) with a bit of preparation.