Thoughtful Thursdays – Handling increasing costs
If your company is facing increased costs, what are you doing to mitigate the potential of lower profit margins? Lets assume your operations are under control and there is not much to gain through productivity improvements, where does that leave you?
One of the most feared sales calls is the one where you are challenged with the task of informing your customer that prices are going up.
Excuses abound; “I’ll loose the customer”, “they’ll never accept an increase”…
From a business point of view, how long can you accommodate lower profits? When approached properly, a price increase discussion should not be something you fear.
Here are a few tips that may help you:
- Determine the reason for the price increase
- Start sending signals early about the impending increase
- Calculate your new price(s)
- Determine when the increase will be effective, and how much notice you need to provide
- Prepare your script
- Anticipate the objections and prepare your responses
- Be prepared to negotiate (Being prepared does not mean you have to negotiate)
If you are well researched and prepared, the discussion will be much easier to have. It may lead to a negotiation where you more business is made available.
I used to dread having price increase conversations, but through experience the process became easier. My success rate improved dramatically once I took the time to prepare, script and practice the presentation. You may be surprised to hear your customer say they were wondering when prices were going up.
If you do not act on your increased costs your customers may perceive you have been over charging.
Good selling,
Richard
Have a question about sales? Contact Sakanashi and Associates Inc. and I will respond.
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