Prices Increase And Savvy Marketers Add Value

Prices Increase And Savvy Marketers Add Value
by Michael Fleischner

Each year, thousands of companies consistently raise prices to increase margins and offset growth in various costs. For anyone working in corporate America, you are quite familiar with this tactic. For marketers, rising costs are always a challenge.



Price increases can negatively impact the sales and marketing efforts for today's busy marketing professional. A price increase on products or services that haven't changed creates a difficult scenario for current customers familiar with a lower cost. This is especially true when we hear objections from our customers expressing their dissatisfaction. With few or literally no changes to a given product overcoming objections is difficult.



A key concern among marketing professionals is that customers will quickly move to a competitors product as soon as they hear the words price increase. This is especially true in markets where your competitor has a similarly priced product. There is always someone else that your customer can buy from. The good news however is that few customers migrate because of price increases.



There are a number of reasons why customers do not jump ship so quickly. The bottom line is that switch has costs associated with it. These costs are both and emotional as well as financial.



Consumers have been conditioned to ask for a discount or find the sales rack. When introducing a price increase to your customers they are going to want to avoid it at all costs. This is just human nature. But this also explains why they will continue to ask for discounts long after their customers even though they wont leave you.



Below I list just a few things to consider before communicating a price increase to customers. Do what you can to lighten the load or simply divert attention to something of greater value.



Add value that is greater than or equal to your price increase. Customers do not want to pay more for the same old thing. When they do, their perception of value diminishes. Provide additional services, support, or terms to deliver additional value that is substantiated by price.



Evaluate the cost for your customer to switch. This consideration has always been popular among phone companies. They not only want to sell more to existing customers, but they also want to attract new ones. You must be able to explain to your customer what costs he will incur if he changes providers. These costs may be both financial as well as emotional. How much time, energy, and resources will it take to truly switch?



Do not treat all customers equally. I know it is taboo today to say such a thing but not all customers are equal. Some have been with you a long time. Others are working with you for the first time. Your price increases should reflect the individuality of your customers and the impact you wish to have. Consider treating customers differently.



The last piece of advice I can give anyone thinking about delivering price increases is to fully understand the competition and what types of alternatives are available to those you currently serve.



If your company offers a better package at an equal or more favorable price, the notion of losing droves of customers over a single price increase really is not an issue. If your offering is less valuable however then investments may need to be made to enhance the product or simply revisit pricing.


About the Author:

Michael Fleischner is an Internet Marketing Expert with more than 14 years of marketing experience. He is an author and founder of The Marketing Blog. Explore his search engine optimization book, SEO Made Simple, to enhance your internet business.