How to talk to your clients about rising prices

How to talk to your clients about rising prices

You may be forced to raise your pricing due to supply chain constraints, salary hikes, inflation or the rising cost of raw materials. But it’s never easy to tell customers you have to increase your rates. Their reaction to price increases will be influenced by how well you explain them to them.

WAYS TO COMMUNICATE PRICE CHANGES

  1. Give advance warning

Nobody likes receiving unexpected news that will affect their bottom line. As a result, notifying customers of price increases as soon as possible is critical. If prices are due to rise in the new year, it’s better to announce this during their mid-year planning period, rather than waiting until Q4.

  1. Mention cost movements when setting up an appointment

The shock element may be minimised by mentioning costs when setting up a meeting with a customer.

  1. Do it face-to-face

Whenever feasible, these messages should be delivered in person. Being present is key in sales – not simply witnessing the client’s reaction, but also understanding their thoughts and feelings. 

  1. Begin on a positive note

Set a pleasant tone in the meeting after the news is delivered and everyone agrees. Use positioning comments to do this. Set the tone for the discussion by referencing the bad news in a positive way.

  1. Explain the reasons behind price changes

A rate increase is not just for show; they are required. Describe your reasoning. Express your confidence in your ability to keep costs low in the current rate environment.

E.g. “We haven’t raised fees in a long time. To avoid raising prices thus far, we have slashed operating costs and reduced our headcount. However, in order to stay afloat, we must…”

  1. Discuss the good that comes with these changes

There are hidden advantages for the customer if the price goes up a little. It might be possible to maintain a high level of customer service while raising your rates, for example, or engage in more research, product development or system design. 

  1. Empathy is essential

In sales, empathy is often considered to be the most crucial characteristic to display, and now is the time to do it. As you respect the client’s sentiments, you may also remind them that they can increase rates with their own consumers as well …

About Sam P

EnterpriseZone Staff Writer

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