How to Address Price Changes
1. Be truthful.
A 2022 survey by Gartner revealed that nearly 40% of consumers want detailed and honest explanations for price hikes.
Specifically, they want clarity – no jargon, blame, or redirection.
In recent years, consumers have asked for more transparency from brands. Back in 2017, a report by Nosto (formerly Stackla) revealed that authenticity is one of the main factors impacting consumers’ purchasing decisions.
This authenticity builds trust, which is key to maintaining customer loyalty. In fact, a 2022 Edelman report shows that trust ranks above product quality, convenience, and reputation. Brand trust is even more important than consumers’ interest in the product.
With this in mind, being truthful about the reasons for the price changes is key in preserve that delicate customer relationship.
2. Share proactive steps to manage pricing.
In the same Gartner study, respondents revealed that they want brands to share the practical steps they’re taking to minimize the pressure on customers and avoid future price hikes.
This can look like reexamining packaging strategies, adjusting to smaller profit margins, and offering more sales and discounts.
According to the study, nearly 40% believe companies should be absorbing some or all of the inflation-induced costs instead of passing them to customers through price increases.
The more active the company seems in remedying this situation, the more loyal customers will be.
3. Personalize your message.
Receiving notification of a price increase is difficult news to get. Brands should soften that delivery by personalizing their message.
This means no mass email. Instead, send an email to each customer that addresses them by name. For both small and large businesses, this is easy to accomplish using personalization tokens available on email marketing platforms.
Another way to personalize this message is by making the sender a representative from the company, instead of a generic email address like “info@yourcompany.com.”
Seeing a message signed by the CEO or someone from the executive team will add a personal touch that shows care to the customers.
4. Notify as early as possible.
The earlier you can notify your customers of a price increase, the better.
Think about it from this perspective: If you were renting a home, how would you feel knowing that in a couple of days, your rent was going up? That would probably be jarring and make you question renewing your lease.
A general rule of thumb is to notify them at least one month in advance. This way, they can take advantage of current prices or make the proper adjustments.
However, how early you notify your customers will vary greatly on the type of product or service you offer.
What to Avoid During Price Increase Notifications
1. Sending generic emails.
While it’s always important to personalize all communications with your customers, it’s crucial when delivering not-so-great news like this.
If you’re a very small business, perhaps notifying your customers by phone is a manageable approach. For larger companies, a personalized email is a way to go.
No one wants to feel like a number. So, take the time to add those special touches that will make your customers feel valued.
2. Not offering follow-up options.
When announcing a price change, you may have a few customers who have questions and concerns.
It’s important to prepare for this and have a plan in place to address them. Your customer service team should know how these changes will impact the customers, when the changes go into effect, and any other relevant details.
In addition, give your customers a way to reach out to your brand. Perhaps it’s a dedicated phone line, email address, or chat.
3. Not notifying your employees.
Once the price change has been confirmed, it’s important that you first notify your employees.
This is especially important for customer-facing roles, as they should have the most updated information on your products and/or services. You wouldn’t want any miscommunication surrounding price, which could greatly impact your relationship with a customer.
Prioritize notifying your customer-facing employees and working your way internally before notifying your customers. This will ensure that everyone is on the same page and knows how to proceed during customer interactions.
Price Change Notification Structure
Here’s a breakdown of the structure to use when announcing a price increase:
Announce the price increase.
Provide the context and reason for the increase.
Emphasize the continued value you plan on providing.
Thank the customer for their support.
Offer next steps for follow-up questions and concerns.
Want to see this in a template?
Dear [Customer Name],
We are reaching out to let you know that starting [effective date], the cost of [product or service] will increase [new price or percentage].
We have been working hard to avoid any pricing changes. However, due to inflation, [reason #2], and [reason #3], we’ve had to increase our prices to keep up with the quality of service we strive to provide.
We thank you for your continued support and look forward to keeping your business.
Please reach out to us via [contact information] if you have any questions or concerns regarding this update.
Thank you,
[name]
As many brands grapple with inflation, this playbook will you With notifying your customers in a way that shows care and transparency.