Prices Increase And Savvy Marketers Add Value

By Guest

For those of us who have our own businesses or work in corporate America, the idea of a price increase isn’t new. In fact, annual price increases are one of the fastest ways for you to earn a few extra dollars to improve margins and cover growing costs.

As marketers, when we have to market and sell the same items at a new, higher price, we may find that the tradition campaigns become less effective. This is especially true when we hear objections from our customers. If there have been little or no changes to a given product, then it is next to impossible to overcome objections related to price.

One of the biggest concerns that marketers have about price increases is that of customer attrition. This is especially true in markets where your competitor is priced are lower or about the same as your offering. There is always someone else that your customer can buy from. A recent study I read indicated that even though price can be an obstacle to buying, current customers are less likely to leave you after a price increase.

Many factors determine whether or not a customer is going to start buying from a competitor. In any given market than can be thousands of competitors and in others only 2. But keep in mind that switching has emotional and financial costs.

Your customers, and all consumers for that matter, have been conditioned to find the lowest price possible for any given product or service. When rolling out a price increase, customers do not want to pay full price. This is why they continue to ask for discounts even after a price increase has been put into affect.

Price increase can be modest or substantial. Depending on the scope of your price increase, customers may react in a very different manner. Below I have listed a few things to think about before rolling out your price list. Keep in mind that you may want to segment your messaging to have maximum impact.

Add value that is greater than or equal to your price increase. Customers do not want to pay more for the same old thing. When they do, their perception of value diminishes. Provide additional services, support, or terms to deliver additional value that is substantiated by price.

Evaluate the cost for your customer to switch. This consideration has always been popular among phone companies. They not only want to sell more to existing customers, but they also want to attract new ones. You must be able to explain to your customer what costs he will incur if he changes providers. These costs may be both financial as well as emotional. How much time, energy, and resources will it take to truly switch?

Segment your price increase. Not all customer are equal so treat them differently to make the transition smooth and get the biggest bang for your buck.The truth of the matter is that your customers are different. Some have been doing business with you for a long time. Others are working with you for the first time. Your price increase should be reflective of the individuality of your customers.

In closing, one thing to keep in mind is that you should really understand who your customers may consider purchasing from if you weren’t providing them products or services. Then, be sure to understand what their pricing structures look like.

If you have a stronger package at a better price than you competitors, switching is not an issue. If your offering is less valuable and more expensive, then perhaps you need to reevaluate your pricing. As a marketer, your job is to create a perception of value or remedy for a given need. Identify that need and focus your messaging on meeting that need. When you do, price is rarely an issue.

Michael Fleischner is an Internet Marketing Expert with more than 14 years of marketing experience. He is an author and founder of The Marketing Blog. Explore his search engine optimization book, SEO Made Simple, to improve your online business.

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