With 2023 underway and continuous talks of a global recession, it’s important to be aware of the ever-changing economic landscape. As a business owner, it can be extremely stressful wondering whether or not you and your business can stay afloat. One way to ensure that your business survives is to begin raising prices now before the full brunt of the recession hits. In this blog post, we’ll talk through tips for gradually increasing prices, guide you through the process of communicating these new price adjustments with your clients, and go over incentives for clients to return despite rising costs.
1. Raise the prices of your services gradually
How much you increase your prices is solely up to you and your business. However, consider increasing prices gradually over time. This will give you a chance to see how your clients react to the new prices. If you receive a positive response (people are still booking at the new rate), feel free to continue increasing the cost in small increments until you find a rate that allows you to be profitable while still keeping bookings. Gradually increasing prices will also not overwhelm your clients with too much of a change at once. Over time, these small increases will add up without drastically changing the overall cost of services at once.
2. Communicating your price increases to customers
It’s important to communicate your new prices with your clients in a timely and transparent manner. This can be done through social media, email newsletters, and other marketing materials. For regular clients you’ve formed relationships with, a straightforward conversation either in-person or over the phone is an even better option. This will allow them to ask any questions, better understand why a price increase is necessary, and also give you the opportunity to walk through any changes in your services moving forward.
Additionally, it’s important to give your clients an explanation as to why you’re increasing your prices. Is it solely due to market conditions and the recession? Are products becoming more expensive? Is rent increasing? Being transparent will help customers better understand that an increase was necessary in order for your business to stay afloat while remaining competitive and profitable.
Furthermore, make sure you are communicating these price increases in a timely manner. This will prevent your clients from experiencing any unpleasant last minute surprises which could lead to customer dissatisfaction. They should go into their appointment knowing the price of the service.
3. When customers are resisting a price increase
Remain patient yet firm while communicating these price increases to your clients. Remind them that you still want to provide high quality work at reasonable prices, but need to stay profitable due to increasing costs. It’s imperative to provide excellent customer service and value during these times. Chances are they won’t mind paying extra as long as the value remains intact!
4. Offer incentives such as discounts, rewards, and loyalty programs
While your clients may be slightly disappointed to hear that their favorite services now have a higher price tag, offering the incentives below will give them something exciting to work towards.
Loyalty programs will show your appreciation for repeat clients and will also encourage repeat business. You can offer discounts or rewards when customers come back for their next service. This will incentivize them to choose you and your business as their provider of choice. You can also offer rewards for referrals which will ultimately bring you more customers!
Another option is to bundle services which gives you the opportunity to book services that often go unnoticed. It’s also a way to provide more value and convenience for your clients, and they’ll be excited to try something new!
While discounts may sound counterintuitive, they will help soften the blow of a price increase while also enhancing your relationship with the client and increasing overall sales. They will also show your clients that you understand the impact these higher prices may have on their wallets.
Conclusion
In conclusion, increasing prices of your services is necessary to ensure your business will stay afloat during a recession. The transition can be made easier by communicating openly and transparently with your clients. Offering discounts, loyalty programs, and bundling services is also a great way to show your appreciation and secure repeat appointments. By keeping this guide in mind, you can make sure these price increases are manageable for both yourself, your business, and your customers.
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