Price increases are inevitable in business operations. However, customer satisfaction during price increases is not certain. It’s difficult to convince people to pay for a product, let alone asking them to pay more for the same product. Hence, if price increases are not properly communicated with customers, it may lead to customer dissatisfaction, churn, and negatively impact brand loyalty. To avoid such things happening, price increases should be managed properly so that, instead of dissatisfaction, customers will be more satisfied.
Let’s see why prices increase and what should be done to enhance customer satisfaction in spite of the increase.
There are two major factors that influence price increases: internal and external factors. External factors are due to a fall in the economy, which leads to a general increase in the price of products. That’s totally out of your control. Internal factors are due to organizational demands and structure. In this article, we will concentrate on the internal factors.
As a company, there are two major reasons why your prices should increase: your products grow in value, and your business grows in experience and knowledge, too. Therefore, you cannot offer the same products for the same price because the value you are giving out has increased. While price increases should not happen too frequently, they must happen systematically with consideration for customers as well as business growth.
Whether due to internal or external factors, the following strategies can be used to increase customer satisfaction during price increases:
Customers want every penny that leaves their hands to be accounted for. They could feel cheated if they cannot positively trace the price increase. Therefore, provide honest and clear reasons to customers on the price increase to increase customer satisfaction It could be due to general inflation, operational costs, enhanced cost features, etc. In terms of inflation, it’s easier to communicate this with customers because its a general issue and your competitors are also affected. If the price increases are peculiar to your organization, you need to clearly communicate to them the reason for the price increases.
Customers will appreciate it if the price increases are communicated to them even before you take action. You can also let them follow the processes that later result in price increases. For instance, if you’re adding more features to your products, you can send out a survey to your customers to find out which new features they would like you to add to the product. They are more likely to embrace the price increases when the product features are updated than when you make the decisions without their consent.
They know that the price increases happen to enhance their customer experiences and improve the value they get from each product.
If you’re increasing the prices of your products, make sure that there is a legitimate reason for the increase that customers can see and appreciate. When customers make complaints about price increases, they are not solely concerned about the extra pay they have to make; they only want to be sure that it’s worth it. Therefore, communicate the value of your product to your customers, not the price of the product. When you highlight the value of the products, they become happy and satisfied with the increase.
Help customers feel valued and appreciated by improving their customer experience. Even though customers get more value for each product as the price increases, they also want to feel valued. There are some customers that see price increases as a threat; a good service and customer support system could change their perception of your brand. Ensure that there are faster response times, personalized assistance, and multiple support channels (e.g., phone, email, live chat) to address customer concerns promptly. To provide more support, ensure the provision of educational resources such as tutorials, webinars, and user guides to help customers make the most of your product or service.
Seasons around price increases are usually very touching for customers, and it’s wrong to assume that they should feel comforted since you are providing more value on each product. Hence, it is important to ask for their feedback to know if you are serving them right. Know their pain points, their preferences, and their needs, and tailor your services to suit their demands. This will help to improve customer satisfaction in spite of the price increase.
Finally, customer satisfaction is the highest priority of any business, and it’s important to make sure that customer satisfaction increases even as the business seeks to extend it’s borders through product upgrades and price increases. The matter of price increases is usually touching for customers and the business; hence, it needs to be handled with the right strategy. Know that any growing business should increase their prices because they grow in value and knowledge, which means that the quality of their goods and services also increases. However, businesses may lose customers if they do not project price increases in the right way. If the strategies mentioned above are properly used, the outcome will be unbelievably positive.
