How to Sell a Price Increase

No customer ever likes to hear about price increases. But, if you handle the situation correctly, you can keep your biggest customers happy and still increase your profits. Here are some tips: 

Be selective. You may not want to announce an across-the-board price increase. Rather, increase prices only for new clients or for new products or services. Sometimes you can simply end an introductory discount that was offered to attract new business.

Give more bang for the buck. Customers tend to object less if they feel they are getting more service or additional benefits for their dollar. Make sure the client understands what those additional services or benefits are - for example, an increase in circulation, extended hours, or faster turnaround time. You also may want to consider keeping the basic price as it is but raise the charge for extras, such as rush orders or same-day delivery. 

Tell them why. If a price increase is the result of additional service, explain why the customer benefits from the additional service. If you're passing on an external increase - a raise in fuel prices or an increase in taxes - itemize your invoice to show where the increase is occurring. 

Look for other options. Before raising prices, see if there is a way to increase profits by cutting down your costs. For example, an increase in the price of stamps makes it more expensive to send bills on a monthly basis. Consider setting up an automatic electronic payment or allowing the client to pay a year in advance.

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