Thoughtful Thursdays – Selling a price increase
Many businesses have experienced dramatic cost increases during the past year. Operational expenses seem to running at all time highs in a lot of industries. Increases in your prices are inevtiable.
Selling the price increases to your customers can be challenging, especially if they are frequent. Eroding margins raise a caution flag, and if allowed to continue may result in catastrophic consequences for your business.
Today’s Thoughtful Thursdays sales thought is about selling a price increase.
Be mindful that your direct competition is also experiencing similar cost pressures. If they are not, something is not right and you need to research and find out why. Industry costs should be within an acceptable range that allows for fair competition.
In my experience, the customer will understand your situation. They might not like the results, and open the door to other suppliers, but it does not mean they will change their source.
- Be up front with your customers and explain the reasons for increasing prices
- Give them as much advance notice as possible
- Research industry news to look for announcements from your competition about increases. Use this information to support your position.
- If the business goes out for bids, make sure that you are invited. As the incumbment supplier, ask for the last look. People buy from people they like.
- If your cost situation is volatile, do not extend price protection beyond a safe time frame
A price increase meeting is not necessarily the easiest sales conversation you will have, but it is one of the most neccesary to have.
Good selling,
Richard
Have a question about sales? Contact Sakanashi and Associates Inc. and I will respond.
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