The decision has been made.
“Your company is making a price increase and it’s your job to go out and make it happen. You knew it was coming but you were hoping it wouldn’t happen. You would rather management find other ways to maintain profit without taking a price increase. It’s now time to put all of this aside and begin building your plan of action.”
Remember, no one likes price increases, but they are a fact of life. As a professional salesperson, you can manage this process with excellence or you can allow it to upset you and your customers. Implement Kieran's strategies below and you will handle the inevitable price increase with finesse and confidence.
Explain, But Don't Apologize
When discussing the price increase in a business-to-business environment, it is important to remember that your customers have probably had to have the same discussion within their own business and to their own customers.
A company exists only as long as it earns a profit and it can only do that if it delivers a quality product or service at the right price. This means that the key to any conversation about raising the price is to emphasize that such an increase will ensure product quality and service.
Do not apologize for the need to take a price increase. Apologizing may appear to be courteous, but this is business, and if you apologize, you will come across as if you do not believe in the price increase.
You’ll get on the better side of your client if you’re confident and upfront about the price increase, presenting a solid reason.
You may be tempted not to mention it at all, and to hope people won’t notice, but for most businesses where they have a lot of regular, repeat customers, most of them will notice, sooner or later, and they’ll feel cheated when they find out.
It’s important to lay down the reasons honestly but be wary of saying too much – to avoid over justifying and being unclear.
Talk About your Value
While some customers are very price-sensitive, most people don’t buy only on price. Many will stay with you if they value your product or service enough. So take the opportunity to remind people what they're getting.
Best Quality products, Our Warranty, Our Stock Holding, Our Quality, Our Back Up, Our New products, etc to suit your sector and business model.
Remind customers of your "USP" Marketing and lead Generation, Display stock, Merchandising, Power of our Brand in the UK. You as a Sales Person, Weekly Deliveries Etc Etc. Cut downs OR modifications and so much YOUR company new or old will have, take some time to work out your Unique Selling Points and More.
“Communicate the core value proposition of your company, state some of the key benefits you’ve delivered through the years (be specific), and explain how the cost increase will support the company’s clear goal of solving even more customer problems in the years to come.”
Play Fair With Customers
Explain - The price increase is the same for all our customers.
Emphasize that the increase has been carefully thought through and it is only being taken to ensure continued quality and service.
Stress how the price increase will allow us to improve the overall quality of service they have been receiving.
Explain it’s necessary to maintain the level of product quality necessary for them to serve their customers.
Communicate, Communicate, Communicate
When the new price list has gone out, be prepared to answer a lot of questions, both by email/phone.
Communicating with people clearly and promptly may not succeed in making everyone accept the new prices, but it will at least make them feel as if they’ve been treated fairly.
The best way to make a price increase go down well is to offer your customers options. These are smart business people who know that the value of your products and or Brand is what makes it a market leader and it is not just a price point.
Remind your customers the value they get from your products and service.
Another dimension to this approach is that it might be tough to sell your clients on the fact that they will be paying a higher price for the same service so make sure to frame your messaging and direct your conversation toward continuous growth they’ll experience with the help of your Brand and products.
Show and Explain our Best and New products every visit to as many staff as possible within your customers.…
Remind your Customers that they’re business people too
For this one, subtlety is key.
It’s true – your customers are most likely to have been in the same position as our company is in now. Price increases made business sense for them–and they had to communicate it to their clients just the same.
Get on your customers empathetic side by continuously referencing their role as a business leader and not only as your customer.
You can talk to them about helping them put together a plan to communicate the price increase to their customers (Marketing support to do local advertising or offer our new sales training course to their key staff)
Now they’re on your side and not the seemingly you versus them situation you could easily put yourself in. Note that the increased revenue will help their business as well.
Know how much your customers rely on our products to run their business.
As a major supplier, get them to think long-term by saying that the price increase is necessary to maintain the level of quality and performance they deliver to their customers.
Don’t be sorry. When having this discussion be sure to show empathy for the customer, but remain firm in what you're saying.
Lead time has been given to Customers to prepare them for the price increase.
If the customer senses any hesitation on your part, they will likely try to exploit it in the form of a price concession from you.
Do it in a meeting. Discuss the price increase and give reasoning on every sales call. Don’t let it come to the point where they find out about the price increase on an invoice.
Study the price increase. Believe it. You need to understand that price increases work because they’re best for your company and your customers.
Make sure the price message is consistent for all customers. Consistency and accuracy must be maintained. Contact Me for more advice.
Don’t hesitate to escalate. Ensure in your next appointment with your customers you set up meetings with higher key management so they can ask pricing questions.
It’s all business. No need for apologies or playing biases. Trust your company’s decision and take conscious steps to deepen your understanding of the increase
Do not attempt to sell the price increase solely based on how your competitors or other suppliers are also going up in price. This makes you look weak and makes it appear your price increase is based solely on the reason you think you can get away with it.
Do not immediately join in with your other sales people complaining about how difficult it’s going to be trying to get the price increase through. A very high number of price increases fail to stick based solely on the fact the sales force refused to believe and support the price increase. Investing in sales training and motivation to get your sales team on the right track.
Do not discuss the price increase at the very end of your sales call and do it in a manner where your body language appears nervous and your speech is less than confident. Customers will see through that, and professional buyers in particular will pick up on the signs of weakness and attempt to leverage it for an exception.
Remember to Your Competitors service and quality is way below yours.
Do not go into your customer thinking about how you will try to negotiate a smaller increase less than what it is supposed to be. (consider what else your company could offer to help support the customer something of low cost to you but high value to the customer - ie more regular deliveries, paperwork emailed, more visits, retail merchandising etc) If you go in expecting less, you will walk out with less.
In order to be paid what you are worth, you must charge what you are worth. Although this is not something that can be explicitly communicated to the customer, this general sense is what sets apart the best practice companies and high-performing sales professionals.
Keep Motivated – speak to your colleagues…
Believe in the price increase…Believe in you.
Click on my link to see my full details and my main website - I can help you and your company grow sales www.kieranperry.com