Should you Consider Price Increases to Make up for Inflation?
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It’s a common debate among business owners. Should you increase your prices and risk losing customers or leave them as-is and accept your fate?
Most business owners can’t afford not to increase their prices. The cost of doing business has increased too much for businesses to stay afloat if they don’t raise their prices.
Here’s how to make it a seamless transition.
Let your Customers Know it’s not to Make More Money
Be transparent with your customers. Let them know the price increases are inevitable for you to keep up the SAME profit margins, not make more.
Tell them about the higher cost of doing business. They’ll understand, they watch the news and see the price increases themselves.
Be 100% Transparent
Don’t try to hide your price increases. Instead, post it – let your customers know, ‘hey, there is a price increase coming and here’s why.’
When you try to hide it, they get angry and will become disloyal. However, if you tell them upfront and even give them a date that prices will increase, it will go much smoother than you think.
Check out your Competitors
Don’t guess how much you should increase your prices – see what your competitors are doing. Of course, some of your price increase will depend on your cost of doing business, but a part should also have to do with what’s going on in the industry.
You don’t want to shortchange yourself, but you also don’t want to make the prices so high that your competitors look much more appealing.
Cut Costs if you Can
If there are areas you can cut back on your expenses, do it. This may reduce the amount you have to increase prices.
Don’t cut corners, though. You don’t want to provide your customers with a lesser quality product or service. Only cut expenses that won’t affect the quality of what you provide. Most customers would rather pay a little more and still get your quality service.
It’s not easy deciding to raise your prices, but sometimes it’s necessary. Inflation rates are at an all-time high right now, and if you want to stay open, raising your prices might be mandatory.
Review your business plan, reassess your business’s status, and decide the best course of action. Don’t jump in headfirst without doing your research, checking out your competitors, and even talking to your customers to get their thoughts.