Nine ways to raise your price and not lose customers
If you’ve been wanting to raise the price of your products or services for a long time, but you’re afraid that then all the customers will leave you at once – this article is especially for you. Here I will give detailed instructions on how to raise prices and not lose customers. It is very possible that you will even have more customers, if you use these ways of raising prices correctly .
And now let’s understand each of these ways of raising prices in more detail.
Sales by raising prices.
I’m sure there’s no need to prove to you that you just need to raise prices periodically. And it’s not just because of inflation and rising overhead costs.
You probably know that price and quality are almost directly related in the minds of our potential customers. In other words, it is very difficult to convince someone that a cheap product can be of high quality.
On the other hand, we also really don’t want to work for pennies all our lives. It’s better to do less work, but better and more expensive, right? It is so, but many marketers hit a wall when it comes to practice.
It is necessary to raise prices, but it is very scary. What if no one wants to buy? What if we will lose all our customers and will have to reduce prices again? Then again, they say there is a crisis in the country, and everyone is saving on everything. There is no time for fat…
The idea for this article came to me quite recently, when I was selling an electronic product of one author. The peculiarity of that sale was that I set the price of this product 3 (three!) times higher than the price the author was selling it himself. And guess what? I got even more sales than the cheap price.
So I decided to put together this little tutorial on exactly how to raise the price so that I wouldn’t lose all my customers. Be warned, however, this article is all about “tricks” and “tricks. In other words, it won’t give you a sustainable competitive advantage.
Not a single “trick” has ever made an outsider the market leader. For that you will need to seriously pump up your “base. Read more about this in the article – “Why the value has no effect on the price of your product” (opens in a new tab).
In the meantime, let’s move on to the techniques of raising prices.
Method #1 – “Aunt Luda’s Trick.”
A humble Aunt Luda, a veteran merchant, works at the market near our house. She certainly has something to teach all of us. For example, the prices of her potatoes, cucumbers and carrots are always slightly higher than the prices of exactly the same potatoes, cucumbers and carrots at the neighboring vendor. And there are always a lot of customers at Aunt Luda’s.
Personally, I only recently learned that these same products are sold cheaper nearby, because I always went straight to Aunt Luda, and did not even look around. And all because of the simple bundle of greens that Aunt Luda always gave me as a gift with any purchase I made.
Sometimes it was dill, sometimes parsley, sometimes basil. In short, a bundle of any of this green stuff, which I can’t stand anyway, costs literally pennies. But by contributing this penny “bonus” Aunt Luda has in my face a loyal customer, who will never go to buy potatoes at the neighboring vendor, where they are almost 5 rubles cheaper. In your business, you can also use this technique.
Add something inexpensive to your product, and raise the price significantly.
Another example – you can add certificates to your electronic courses. Certificates cost next to nothing, but they do raise the price tag nicely.
Method #2 – “Sly Winnie the Pooh.
This is also called “sell honey in little jars. The idea behind this technique is that you don’t try to sell a big product for a lot of money, but you break it up into many small products. Each of these products individually is cheaper, but if you add them up, the final price will be 2-3 times higher.
In other words, you don’t have to try to sell comprehensive SEO or Direct promotion to your client. You can do separately market and competitor analysis, separately semantic core collection, separately campaign creation, separately campaign optimization, etc.
Method #3 – Seed in a bag.
This is also a very simple technique that only requires you to have some diligence and patience. If you have a bag of seeds, you can pack each seed in a separate bag. Then you will have a huge box of bags that you can sell for 10 times more than the same bag.
In other words, you visually increase the size of your product, and people “get” what they’re paying money for. Next time you’re in some fancy boutique, pay attention to the bags they put your purchases in.
Tell me, why do they make such huge and useless bags? There isn’t more than one box in there anyway (the bags are huge, but very narrow). As a result, you come home with so many bags and boxes that you cover the whole hallway. Terribly stupid of them, don’t you think?
Method #4 – Update.
This method is best known, of course, to infobusinessmen. You want to sell the same product for more money, no problem. Put “2.0” after the name and go ahead. That said, you can make no (or very minimal) changes to the product itself.
Think about how you could make a “2.0” version of your product or service and explain the price increase. Another option for the same technique is to come up with a new name for your product or service. “No one is interested in “consulting” anymore – try selling a “coaching session. Fed up with “coaching sessions,” sell “Strategic Business Analysis,” or something else you come up with.
Method #5 – Problem Solving
This is purely a “sales” thing. In describing your product or service, try to describe not what they do and what their features are, but what problem they solve for your customer.
That way you are selling a solution to a problem. For example, selling SEO services, don’t just talk about attracting customers to your potential client’s business. Say that the entrepreneur will no longer have to engage in cold calls, if his site will be at the top of search results.
Determine what problem the product solves for your potential customer, and emphasize that in your sales pitch. People are always willing to pay more for a ready-made solution than for some product (even if it’s the same thing).
Method #6 – “Stop! I’ll shoot!”
A man is walking down the street. Suddenly he hears a voice – “Stop! I’ll shoot!” Man: “Stop!” Voice: “Shooting…”
The essence of this method is that we immediately raise the price, and we inform our potential customers and say that tomorrow we will raise the price tag again. This technique works best if you have a customer base (or subscription base or sms-mailing).
Your base probably has a lot of people who “have been meaning to buy for a long time, but haven’t yet”. Instead of enticing them with another discount, try to raise the price tag, and happily let them know about it. Add only that tomorrow (in two days), there will be another price increase.
You’d be surprised, but there will be more people willing to buy at a higher price than those willing to buy at a discount. Psychology-s…
Method #7 – Aunt Luda’s Trick – 2
Oh, the magnificent Aunt Luda. How many potatoes have I been forced to buy and (worse) eat for the pleasure of watching her work with customers. One trick I particularly liked. If a customer is in doubt as to whether or not to buy, Aunt Luda utters the magic phrase: “Everyone takes this one…” and the customer breaks down. If that’s ALL they take, then who is he to go against public opinion, right?
Social proof is one of the best sales techniques. Add a “sales hit” or “customer’s choice” to the image of your product, and it’s already great. Ever booked a hotel through bucking.com? Have you ever seen that sign that says “12 more people are looking at that hotel right now. There’s nothing stopping you from putting a similar script on your site. “
Don’t forget that people believe “social signals” far more than the most golden video reviews.
Method #8 – “Choice Without Choice.”
This is another favorite trick from the infobusinessmen’s piggy bank. Unfortunately, it’s not yet used as often in other areas. The essence of the technique is that you put several price packages on your product or service.
As a rule, three packages are enough: Economy (cheap and cordial), Gold (all inclusive except for the choral praise of God-like client), VIP (there is also a choral praise). Most people will still choose Gold, but it’s much better if they choose not between “buy or don’t buy” but between different price and package options.
Comparing packages and prices triggers the principle of consistency in decision making, and that’s a great thing. And the high price of the Gold package will still seem ludicrous compared to the VIP package.
Method #9 – “The stall in front of the house.
I introduced this pricing method in a seminar for translators and translation managers back in 2008. And this method can even be classified as a “long-term” competitive advantage.
Do you have a booth near your house? You don’t have to answer, I know there is a stall near every house. And that stall probably sells sausage and bread. And for sure these sausages and bread are much more expensive than in other places.
But you still continue to buy sausage and bread from that stall, even though you know where you can buy it cheaper. What are you overpaying for? For convenience. It’s very convenient that you don’t have to go anywhere, and you can calmly on your way home stop by this stall and buy everything you need.
Think about how to make your customer comfortable, and he will buy from you more expensive, and not look for your competitors who have cheaper prices.
First and foremost, of course, we are talking about service. Deliver the product to the apartment, not to the doorway, answer the phone quickly, behave responsibly with the client, make his life easier, not harder, and he will reciprocate.
How to raise the price of your products or services in the right way
Raising the price of your goods and services in a planned manner is not a whim, but a necessary measure. Let’s figure out how to raise prices correctly so you don’t lose customers or quickly find new ones.
Contents of the article
Why do you need to raise prices?
Otherwise you’ll be working at a loss. Everything is always more expensive. Imagine: you raise the wages of your employees, you start paying more money for delivery, you budget more for advertising. And if you leave product prices unchanged, you’ll just recoup the cost of production or go into a lot of debt.
Constant price increases are an integral part of Russia’s economy. And the rise in price of some goods entails the rise in price of others.
For example, just since the beginning of 2021, the prices of building materials have increased by 20-25%. If you are engaged in construction and repair, it is no longer possible to close projects at the previous prices.
Gasoline is constantly rising in price, just like any other fuel. This means that the transportation company today will not agree to carry goods for the conditional 20,000 rubles, as yesterday. You will have to spend more money to bring the goods to the warehouse. Count the cost of the product: when fuel prices go up, it goes up too.
Even the Internet advertising market is growing and will continue to grow, according to expert forecasts. This means that there will be more competition, and you will have to spend more money to attract customers. Even now, users are developing banner blindness: it is difficult to entice simple creatives, you have to try different channels and ways of promotion.
13 tips on how to raise prices so that customers do not scatter
Prices will have to increase in any case. The question is how to do it correctly. You can’t sell goods today for 500 rubles, and tomorrow change the price to 600 rubles and keep working: this will cause an outflow of regular customers. They will go where it is cheaper – to competitors. To prevent a sharp drop in sales, use the advice.
1. Warn about price increases in advance.
This is the minimum you can do for customers: place a banner on the home page, add notification to the cart, send letters. To avoid negativity, explain that:
- this kind of thing happens throughout the industry;
- it’s a forced measure – you can’t resist the market.
That way people can prepare themselves. Those who really can’t pay the new price will leave, but may come back later. And the remaining customers will show more loyalty to your company.
Such a move with a warning can even stimulate additional sales, if you encourage customers to buy now at the old price. They’ll place an order to save money. Users who are hesitant may also buy the product so they don’t overpay later.
But a simple warning doesn’t always work. This is what Svetlana Sadovnikova , clinical psychologist and founder of the Psyelements project, said about her experience:
“I run a private practice. Some clients go into long-term therapy and some work for short periods, so there can be different rates for different categories of clients at the same time.
The first time I raised my prices was after graduation. Often final-year students consult clients for free, but I do not agree with this approach: when a person receives something for free, the value of this service or product is equal to zero for him, and, accordingly, he often treats his work “slack-jawed”. Therefore, I conducted my first consultations for a nominal fee.
Upon completion of the training I realized that I was ready to raise the price for my services. After studying all the marketing techniques and considering that at that time I was working for a very small fee, putting out, however, to the full, I decided that the price increase of 50% would be acceptable (for reference: my advice as a student cost 500 rubles, with an average price of 2500-3500 rubles, my goal was to get 1000 rubles for a single consultation). All my clients were warned about it a month in advance, with full justification of why prices are going up. The plan failed. People didn’t understand why they had to pay twice as much, and more than half of my clients at the time left me.
The next time I decided to raise prices gradually, but a little more often: once every six months the rate was increased by 20% for current clients (in my case from 1000 rubles to 1200 rubles, and after six months to 1450 rubles), and for new clients the rate was increased immediately by 500 rubles. With such an approach I manage to retain all my current clients with a slight ‘exit’ from work”.
2. Increase prices gradually
Smooth price increases usually cause less negativity, people see that the cost increases everywhere. You, too, can warn of the coming smooth change in price and earn a reputation as an open company that can be trusted. Or you can gradually raise prices without warning – that’s what Alexander Kadnikov, CEO of Digital Agency Anverali, did:
“As far back as 2013 when I didn’t have my own digital agency and I even didn’t think about it I increased and decreased the prices in the company as an experiment. I was working at that time in the company “EDS-project”. We sold LED strips, modules and lamps. We had an Internet store and it was necessary to stimulate sales somehow. At first we did discounts of 10, 15 and even 50%. But I could see from the statistics that this did not yield much result.
Then I decided to try and do the opposite. What if I raised my prices? By the same 10-15%? After I coordinated these manipulations with the director, the experiments began. Strongly did not rude, but steadily raised the prices by 10%, each month for different products. And it worked.
At that time it was an insight for me, when I realized that price is a myth. Yes, there is a market, but you decide what the price will be. It was a pattern breaker. People bought more when I raised prices, not when I gave discounts. Now that I have my own agency and prices for our services are not fixed in the price list, because we consider everything individually, I practice raising the price per hour of a specialist. It works.
Now for the nuances and facts: If you raise prices for current clients, some of them will leave. But you’ll make money on those who stayed, new ones will also come. Don’t be afraid to lose those who aren’t willing to pay for your product or service. Your product or service must be of high quality and good value, otherwise you will fail in the long run. Raise your prices smoothly and there is a chance that your customers will not even notice it, while your net profit will increase.
The conclusion is this: the price is just a figure that you set yourself and that your customer agrees to. Don’t be afraid to raise the price of your product or service if your product or service is really worth it. Don’t forget that everything is in our heads. In 2013 I had a pattern break and you will have one too if you try to do things differently.
Let’s say you’re used to buying coffee at the coffee shop on the first floor of your house. It’s very good, and the barista always smiles and says a compliment. Yesterday the coffee was 100 rubles, today it’s 105 rubles, and the barista says in confidence that in a month the price will rise to 130 rubles. You still continue to go to the coffee shop – you like it there, and in the neighboring prices increased immediately to 130-135 rubles. So do your customers: if you give them good service, they will stay even with a gradual increase in price.
This method works if the cost of the product is also increasing gradually. With a sharp jump in value by 10-15% also possible to use this tactic, but then you will have some time to work at a loss.
3. Add something useful for free.
In the market there is a stall with fruits and vegetables. Products in it cost a couple of rubles more expensive than in neighboring stalls, but still there is a queue. This is because the saleswoman Maria gives each customer something for free: an apple, a pear, a bundle of herbs. The psychology of customers is such that most of them will buy at this stall, even if the one next door is really cheaper.
You can raise the prices, but add something useful and free to the product. Free shipping or packaging isn’t it: you need a chip your competitors don’t have. For example:
- a new soap sample from a handmade soap seller;
- three free lessons from another course with the purchase of a basic course;
- consultation from a specialist when buying access to the service.
You can make different variants of gifts – offer bonuses depending on the amount of the order or purchased goods. The main thing is that the gift doesn’t cost the company too much, and the net profit remains.
4. Split one service into several.
The sleight of hand and no cheating – you can split one service into several and raise their cost. Then the price increase will go unnoticed, and customers can choose specific products.
Sell a comprehensive website promotion – now offer separate development, SEO, content and contextual advertising. Building a house “turnkey” – now sell separately the development of the project, pouring the foundation, construction of the box, repair and decoration of the site. Think about how to split up your service and make a financial plan to see how much the new products should cost.
5. Combine multiple products into one
Reverse advice to those who sell products or services separately. Combine them and raise their prices: that way their change will be imperceptible from the customer’s point of view.
You can make sets of beauty products, offer comprehensive cleaning instead of cleaning and window cleaning separately, to accompany the company entirely – to deal with accounting, financial accounting, legal issues. Or add new products to existing ones. This is what Vladimir Shlykov, general director of the marketing agency id:Result, did:
“We work mainly with small businesses. It was obvious that the pandemic would hit them the hardest and some clients would leave, because their very work is tied to communication with people. It would have been impossible to keep them by lowering the price. Likewise, to get more orders than the year before seemed doubtful, against the backdrop of a falling economy. The only remaining solution was to increase prices.
Despite the logic of this decision, there were doubts. Would new clients come if the prices were not the most profitable on the market? Nevertheless, two major products (corporate websites and online stores) rose in price by 20% and 25%. For related services, a small increase of up to 100%. To somehow justify this increase, we included additional services in products. Given the fall in demand, the workload of production allowed us to do this without additional costs. In fact we actually received fewer orders for all products during the year, but most likely that would have happened anyway, and here the decrease in turnover was only 18%, although it could have been up to 35% at the old prices”.
6. Raise prices on some goods and freeze prices on others.
You can warn customers about possible price increases or not.
Give them a warning – customers will know you care. Tell them that the cost increase is a forced measure. Announce that the prices of specific categories of goods will remain unchanged for a month, two, three.
Do not warn – customers may not notice the price change if they buy more than one item. That’s how promotion works in online stores: people put 5-10 items in their cart and don’t keep track of the cost of each one.
The main thing is to freeze the prices of the goods, the cost of which has not risen much. Otherwise, profits will remain the same or there won’t be any, and this can lead to cash gaps, higher costs, and working at a loss.
7. Offer different rates for the product.
A similar technique is often used in the infobusiness – offer three levels of access to the course:
- The cheapest with minimal or no support;
- medium with the support of curators, checking homework;
- the most expensive with personal mentoring and bonuses.
Consumers most often choose the average rate because it is psychologically easier to accept.
By offering different rates for a product, you create “choice without choice.” Customers consciously choose, but still buy the product at one of the offered prices most of the time. Ideal if you work in the infobusiness niche.
If you sell other products, also try offering different “fares”: a large and small cup of coffee, a small, medium and large set of fishing lures. The main thing is that the cost of each rate is not lower than the cost of the product.
8. Offer discounts and promotions after a price increase
The advice is not about “how to raise prices,” but “how not to lose customers” afterwards. If possible, after raising the price conduct promotions and make discounts. Only beneficial to you: for example, reduce the cost of 5% for those who subscribe to social networks of the company, and thus gain a loyal audience.
Do not arrange the action all the time. Otherwise you will get as in all the annoying reception: raise the prices, in order to sell “at a discount” of 20-30% with a red price tag. Customers do not like manipulation, although part of the audience will still buy goods even under such conditions.
9. Make an additional service a paid service.
A good solution if the cost of the product has not increased slightly. Leave prices as they are and just offer a paid service:
- You used to deliver for free in a day? Now deliver in 3-4 days, and make express delivery a fee.
- Wrapped the goods in beautiful boxes? Ask for money for gift wrapping, and give the usual free.
- Customers paid only for the flowers, and the paper and decorations in the bouquet were free? Leave the basic items as they are, and sell the unusual decorations and beautiful paper.
Surely there will be customers who will use the free services. But there will be those who would prefer a paid more comfortable service.
It is desirable that the cost of the product with free service is higher than its cost price or at least equal to it. Otherwise, with a large flow of those who choose to save money, the company will work at a loss.
10. Increase the value of the product in the eyes of the customer.
It’s like in fashion boutiques: you are given a narrow bag, in which only one thing fits. But a bag with a logo looks nice in your hands – it subconsciously has a positive effect on your mood and self-confidence. Or like Coca-Cola: the producer just started selling it in glass bottles. The cost of production did not go up much, but the retail price almost doubled. A drink in glass is more valuable in the eyes of the consumer, partly because it shows the company cares about the environment.
So you can do the same – increase the value of the product in the eyes of the consumer and quietly raise prices. Sometimes it is enough just to redesign the landing page on the website or slightly change the product (packaging). People will be willing to pay for a premium or quality solution to their problems.
11. update the product
Each successive iPhone model costs more and more. Not just because everything around you is getting more expensive. Another good reason for the increase in price is a change in the product itself: a new version of iOS, a better camera, new features.
If you need to raise the price of a product, update it, too:
- use different production consumables and explain to customers why the product is better;
- add new features to the service – for example, add the VKontakte parser to the Instagram and Facebook parser;
- redesign the appearance of the product and slightly change its characteristics.
You can present the changes as an improved version of the product. Be sure to explain to customers why it is better than the previous one: this way you will convince them that the product or service will really solve the problem in a better way and therefore should cost more.
12. Add social proof
Social proof boosts sales – their principle is described as far back as Robert Cialdini’s book The Psychology of Influence. If a person sees a queue or a large number of purchases, he subconsciously thinks that many people can’t go wrong. And it happens that there are three identical outlets, but one has a queue and the others are empty. People passing by are likely to fall in line as well: that’s how social proof works.
In online sales, social proof can be the number of reviews of a product and the number of purchases. Raise the price of the product and show that it’s in demand. The easiest way is to put a “bestseller” sticker on the product. The more complicated ways are to show the number of orders for a particular product, or allow customers to leave reviews about it. And you can do what Booking does: show a notification every time someone buys a product or puts it in the cart.
13. Raise the price of related products
Sometimes you can sell products at a loss if the potential profit covers your costs. For example, at the start of sales the cost of the Xbox 360 game console was 40% more than its retail price. Microsoft made no money on the sale of the consoles themselves, but received $ 12 for each game disc for the $ 60 consoles.
You, too, can not increase the cost of the main product and at the expense of this stand out from the competition. Raise the price of additional products and offer them directly at the time of purchase of the main product, as implemented in many online stores and Marketplace. A person will be satisfied with the fact that he bought the main product favorably, and may make an impulsive decision to buy an additional product.
If you do have to raise prices, make the cost increase as painless and unnoticeable to customers or explain to them that the product now works better. Some customers will leave anyway, but most of them will stay. And new ones will come, so you won’t lose anything and can continue to work with the new prices.