Management: How to Raise Prices Without Losing Sales
As a manager, you seek new ways to drum up sales, but offering a discount is not always the answer. As the cost of goods fluctuates, you may have to adjust your prices to maintain profitability. Having to increase prices or rates for an established product or service is challenging, yet it is not the catch-22 that it appears to be if you tactfully address the issue.
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Instructions
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Evaluate what products or services need increases. Analyze your invoices and profit and loss statements; identify where your profits are decreasing and the contributing factors.
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Notify your customers ahead of time. Temporary signs, mailers or inserts are a few examples of how to spread the word. The important thing is that your customers have plenty of advance notice, and that you are honest as to why.
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Add extra value to your wares or services, especially the ones that you're increasing. One way to go about this is to add value on the back end of the customer's purchase. For example, frequent buyer cards for retail establishments work well.
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Market your items or services unique qualities. Promote all the features and or factors that make your product or service stand out in the market, the more specialized a product or service is, the more your customer can appreciate the value in it.
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Tips & Warnings
Collaborate with your accountant so you have a firm understanding of where your costs have increased.
Don't raise prices for the sake of raising prices; there should be a legitimate reason. For example, if you run a restaurant, and the price of dairy products has increased only raise prices on the meals that have significant portions of dairy products-as opposed to an across-the-board increase.
Don't drastically overcharge your customers.
References
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