Navigating inflation can be tough for businesses like yours. It can be a challenge to balance the need to raise prices to cover costs with the desire to provide value to loyal customers. You might have noticed other business owners apologizing for price increases, but sometimes, it's unavoidable. While profitability is crucial for survival, you also understand that your customers may be experiencing financial strain.
That's why having an effective strategy to communicate the value behind your products and services is essential now more than ever. Helping your customers understand why prices are increasing can make the transition smoother and maintain their loyalty.
Here are 6 ways to communicate value to your customers:
Highlight The Value When Little Caesars Pizza® recently raised their prices, they didn’t focus on the 11% price increase, nor did they justify the increase by marketing the message of how many years their price had remained the same (since they began in 1997). Instead, they focused on the message that their customers were now receiving 33% more pepperoni on their pizzas. This shift in focus can help customers see the value in the price increase.
Create a Sense of Urgency Using phrases like “for a limited time” can create a sense of urgency, even when there are no cost savings involved. This tactic can be used to introduce price increases gradually, giving customers a final chance to buy at a lower price. You can use this language when you know a price increase is inevitable. Market your current offerings with the language “for a limited time” and then increase your price or run a special under that same language and then increase your pricing. You’re giving your customers one last opportunity to buy from you at a lower price.
Highlight Cost Savings Opportunities Consider how your business, services, and products offer unique savings for your customers. For example, does your diet meal prep service help them save on grocery bills or reduce dining-out expenses? Estimate these savings and share them with your customers. Engage with current customers to understand their savings and use these insights to market your value proposition effectively.
Host Exclusive Sales Events Consider hosting exclusive flash sales for your newsletter subscribers or social media followers. This targeted approach can drive more business in a short period and make your loyal customers feel appreciated by offering them exclusive discounts.
Inform Customers of Optimal Buying Times For loyal repeat customers, consider training your employees to offer savings tips, encouraging them to return. For instance, if your product business receives new stock on Tuesdays, inform customers of this opportunity. Customers who appreciate a good bargain are likely to return regularly if they feel they can access items first.
Offer Value Bundles When considering price increases, explore creating bundles that provide additional value to your customers. Identify items or services that can be combined to offer more for a slightly higher price. Customers are often willing to pay more if they perceive they are receiving greater value. It's worth noting that many competitors are raising prices and reducing quantity. By offering value bundles, you're distinguishing yourself in the market and providing an attractive proposition to your customers.
Like many business owners today, you may find that increasing prices is becoming unavoidable. Despite any discomfort this may cause, rising costs often necessitate passing some of these expenses on to your customers to ensure the sustainability of your business. In such circumstances, the above strategies to enhance perceived value should help you feel more confident about the need to adjust your prices.
*This article features excerpts from Christina R. Green.