Like many businesses, the chances are that your overheads have increased over the past few months and are set to increase further. Rising energy and fuel prices impact everything from wholesale costs, to logistics, and office running costs. Consequently, price increases are near unavoidable but any increase in price risks losing a customer. After all, it’s easy for a customer to respond to a price increase by looking at other options. Their costs aren’t likely to be going down either.
Therefore, it’s important not to simply communicate price increases as a regrettable response to inflation. Doing so only makes the customer feel that you’re not taking their situation or concerns into account. Instead, you should be open to communicating openly about the situation while empathising with theirs.
Understand What Your Customer Values
It helps to understand why your customer is your customer, and not somebody else’s customer. Value, after all, isn’t easily defined, and certainly not by the seller. Ultimately, the customer defines value so it’s vital that you uncover what the customers needs and wants truly are. Asking open-ended questions and listening can help you solve the value mystery.
Building the Value
Once you’ve uncovered what the customer truly values, you should be able to communicate how your new pricing structure will continue to benefit the customer. Since most buying decisions are made emotionally, and then justified with logic after the fact, it may be useful to use the ‘Feel, Felt, Found’ approach. Communicate that you understand how they feel, paint a picture of how other customers felt the same way, and then explain how they found the situation worked for them.
Be Assertive but Keep the Customer Happy
Your salespeople should keep in mind that any discussion over price can be taken as an offer to negotiate. Therefore, it’s important that your salespeople use language that doesn’t leave an opening for a counteroffer, and instead limits any wiggle room to alternative product or service options of a different scope. It can often be beneficial to offer multiple options to a customer, as studies have demonstrated that customers are more likely to buy when a range of solutions are presented to them.
If You Must Negotiate…
Sometimes, you will have no choice but to negotiate but you should do so from a position of knowledge. Gain an understanding of how your customer sees your products/services, and ensure your salespeople are aware of alternatives in the market. Tailor any proposition around your USPs, and if you must concede on price, look for concessions from the customer. Try and identify negotiable variables; items which are high value to you, but low cost to the customer and vice versa, and always be prepared to say that if the price must decrease, then the scope or spec of the product/service must change accordingly.
