Marketing Profs

The Painless Way to Raise Prices

Sooner or later, you're going to raise your prices. An intimidating prospect? Sure, but Drew McLellan says you can implement a price hike without alienating your customers. Just apply a little forethought and finesse.

McLellan says businesses commonly raise prices across the board. When you need to do so, just send a letter explaining that you've worked to keep prices steady, and the need for a modest increase of X percent. "But, how else might you get the increase you want without incurring the wrath of existing customers?" McClellan asks.

Two of his ideas:

• Charge extra for special privileges. If you save your customers' valuable time with dedicated customer service lines, faster turnaround or upgraded shipping, they're likely to regard a surcharge as a good investment.
• Raise prices in targeted segments. "A business traveler who needs to be in Pittsburgh on Wednesday and back on Thursday will pay more for a plane ticket than a Grandma planning a visit to her family," he notes. "You probably have similar segments within your customer base."

The Po!nt: Says McLellan, "No matter how you handle a price increase, one element is critical. Be upfront and demonstrate value. Your clients don't begrudge you making a profit."

Source: Drew's Marketing Minute. Click to read the post.

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