Many small businesses may be hesitant to raise their prices out of fear they will lose their original customer base. Increase your rate when it makes sense for your business, your market has changed, or you have realised you are undercharging.
Once you have decided to raise your price, consider the following tips that will help you keep your customers happy.
Keep it consistent
If you raise your price too frequently, you may lose customers as they may think they are being cheated. It is better to change your price annually so that it is in line with inflation rates and to minimise rate changes in the middle of contracts. Make sure you get the price raise right for that year to avoid having to go through the process again in the near future.
Time it right
Raise your price when your customer satisfaction rate is high. If a customer is happy with the quality that you provide, they are positioned to perceive the price rise as fair.
Be prepared to back it up
Price-conscious customers may be resistant because they may not understand why you have raised your price. To avoid the perception that you are just trying to get more money out of consumers, notify your customers with an explanation about why the price must change. A prepared response will also help if customers threaten to leave or try to negotiate with you.