When it comes to raising prices make sure you are not alienating your customers or they may not be your customers for much longer. In this article we will looking at ways of raising prices without offending customers.
Timing Is Key
When it comes to lowering or raising prices the timing can be crucial. If you choose the wrong time to raise prices it may seem like you are trying to gouge your customers. Customers do not like being gouged. If you decided to raise prices try to make it a time when there will be little resistance. For instance, many company will raise prices seasonally like during Christmas when shoppers are not as concerned with how much items cost. If you are going to lower prices make sure to choose a time where it will cause the most impact. If you are a new store you may want to start off with lowered prices so that you can make a name for yourself and, as well, be able to compete with larger, more established companies.
How Much To Charge?
When deciding how much to charge your customers, here are four methods that you should try to avoid. The first one is formula-based pricing. The formula that we are talking about is the one you come up with when you are deciding how much you want to make a year and how many hours a week do you want to work. Since this formula is based solely on your wants why would the customer care?
Another method, similar to the last one, as you are the only one you have in mind while using it is called esteem-based pricing. This is when you determine your worth and charge for it. Again, clients/customers do not typically care about the owner.
The third method to avoid is comparative-based pricing. This is when you look at a price and say, “wow, that's too high” because you cannot imagine affording to pay, say, $1000 on anything. This type of pricing is not actually based on comparing the price of the item or service on a similar one, it is just based on the fact that you might be cheap. Don't concern yourself with charging too much money on things. Believe it or not there are people out there that have more money than you and are willing to spend it.
The final method to avoid is competitive-based pricing. This is when you change your prices based on how much other companies are charging. This may work with bigger companies. The difference is that they are usually competing with 1 or 2 of the other big companies. As a smaller business you will be competing with everyone and this can become overwhelming.
Perceptions Of Value
You can use words to trick your customers into paying more for your product. Try not to avoid commonly used terms for products. Come up with a name that makes your product sound different and fancier. Create a valuable product experience may also convince your customers to pay more and personally address them. Go the extra mile when selling to them. Do they need help or suggestions with their purchase? Throw it in there!
