Inflation has been a big topic of conversation in recent months, with the cost of almost everything rising. From gas to groceries to household items.
As a result, many companies are notifying customers of price increases. If this sounds like your company, read on to learn how to approach price changes and key things to avoid.
How to deal with price changes
1. Be honest.
A 2022 Gartner survey revealed that nearly 40% of consumers want detailed and honest explanations for price increases.
Specifically, they want clarity, without jargon, blame, or redirection.
In recent years, consumers have demanded more transparency from brands. In 2017, a report by Nosto (formerly Stackla) revealed that authenticity is one of the main factors affecting consumer 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 consumer interest in the product.
With this in mind, being truthful about the reasons for price changes is key to preserving this 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 are taking to minimize pressure on customers and avoid future price hikes.
This may look like re-examining packaging strategies, adjusting to smaller profit margins, and offering more sales and discounts.
According to the study, nearly 40% believe that businesses should absorb some or all of the costs induced by inflation rather than passing them on to customers through price increases.
The more active the company seems to be in solving this situation, the more loyal customers will be.
3. Personalize your message.
Getting notified of a price increase is hard news to come by. Brands should smooth this delivery by personalizing their message.
That means no bulk email. Instead, send an email to each customer that addresses them by name. For both small and large businesses, this is easy to achieve through personalization tokens available in email marketing platforms.
Another way to personalize this message is to make the sender a company representative, rather than a generic email address like “firstname.lastname@example.org”.
Seeing a message signed by the CEO or someone on the executive team will add a personal touch that shows care for customers.
4. Notify as soon as possible.
The sooner you can notify your customers of a price increase, the better.
Think of it this way: If you were renting a home, how would you feel knowing that in a couple of days, your rent was going up? It would probably be annoying and make you hesitate to renew your lease.
A general rule is to notify them at least one month in advance. That way, they can take advantage of current prices or make appropriate adjustments.
However, the time you notify your customers will vary greatly depending 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 great news like this.
If you are a very small business, perhaps notifying your customers by phone is a manageable approach. For larger businesses, a personalized email is the 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 tracking options.
When you announce a price change, you may have some customers who have questions and concerns.
It is important to prepare for this and have a plan to address them. Your customer service team should know how these changes will affect customers, when the changes take effect, and any other relevant details.
Plus, it gives your customers a way to reach your brand. Maybe it’s a dedicated phone line, email address or chat.
3. Do not notify your employees.
Once the price change is confirmed, it’s important to notify your employees first.
This is especially important for customer-facing roles, as they should have the most up-to-date information about your products and/or services. You wouldn’t want any miscommunication around price, which could greatly affect your relationship with a customer.
Prioritize notification of your customer-facing employees and work 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 context and reason for the increase.
- Emphasize the continued value you plan to deliver.
- Thanks to the customer for their support.
- Provide the following steps for follow-up questions and concerns.
Want to see this in a template?
dear [Customer Name],
We’ll get in touch to let you know it’s getting started [effective date]the cost of [product or service] will increase [new price or percentage].
We have been working hard to avoid any price changes. However, due to inflation, [reason #2]i [reason #3]we have had to raise our prices to keep up with the quality of service we strive to provide.
We appreciate your continued support and look forward to maintaining your business.
Please contact us via [contact information] if you have any questions or concerns about this update.
As many brands face inflation, this playbook will inform your customers in a way that shows care and transparency.