Is it possible to Raise Prices Without Losing Customers?
If you have decided that conditions are such that you need to raise prices, then set a raise that you can live with for as long as possible. Customers can better deal with a price increase if they know the new price will hold steady for a while. When make frequent, little increases, you create uncertainty – and that has more adverse consequences a single large raise that customers can plan around.
If you have a strong relationship with your customers, it is always possible to be able to raise your prices and not lose customers. However, for most business if you raise prices, it is very likely you will lose some existing “customers”. The good news though is that they were likely not your target customer, and should never have been your customer.
You may actually attract more ideal customers by raising your price. Ideally, you should never be competing on price. As long as you are providing value that people equate to be more than the price you are charging then you can be successful. Customers that are focus solely on price tend on average not to be ideal customers for most businesses. Focus on customers that value great customer service, products, and are willing to pay for it. You will be happier, more successful, and work less.
Utilize your existing client relationships to do some research. Find out what your customers like and value about your product or services. Try to figure out what this is truly worth to your customers, and what your competitors are offering and what they are charging. Personally, I would rather be the best in class for a product or service, have a smaller client base, with higher profit margins, than the discount provider, who is over worked and under paid. However, both methods and strategies work it is really a personal choice, but competing on price is usually so much harder and has a much higher risk for cash flow issues.
I would also agree with Lessie that you do not want to raise prices, but if warranted adjust the price so that you can go as long as possible without another price hike.
