Recently I shared with you 9 things not to do when selling a price increase. Equally important is what you SHOULD do when your company has told you, “It’s time to take a price increase.” The number one thing on your list is to communicate the news to your customers and make sure there are no issues with the price increase.
Below are 11 tips that will help you succeed in selling a price increase to your customers:
1. Develop a list of all the reasons why it is important for your company to take a price increase. This list will not necessarily be shared with your customers, but it will serve as a tool to help you be confident in understanding why it is important to do.
2. Believe 100% in the price increase. Price increases often fail not because the customer doesn’t accept the increase, but because the salesperson fails to believe in the increase. This lack of confidence comes across in the meeting with the customer. The customer may even leverage your insecurity in negotiating a discount.
3. Develop in your mind a price increase that is actually higher than the one you’re taking. By getting your mind thinking about a higher increase, you will have an easier time communicating the actual price increase amount.
4. Build a list of items you can share with the customer that show all of the areas of quality and value your products or services bring to the customer. Use this list as a basis for the increase with the premise that in order for you and your company to be able to continue to deliver the level of quality and service the customer expects, a price increase is necessary.
5. Go into your customer with one price only and the full expectation the price increase is not negotiable. Your language and, in particular, your body language will convey a lot about whether or not you believe in the price increase and whether or not your customer believes they can push back.
6. Go into your meeting with supporting materials you can use to show the customer overall economic trends of the last several years and trends for the future. If your business is subject to changes in the value of currency or commodity prices, you can show this. Key with this, however, is to be very cautious. Do not show this information unless absolutely necessary. Having it with you is many times all you need to help increase your confidence in the meeting.
7. Be prepared to handle service issues or other problems the customer may bring up as reasons why your company should not be taking a price increase. Acknowledge the issues that you and your company are dealing with and explain how without the price increase, the company could wind up having to make other moves that may impact the ability to make service improvements. Key is to not be specific and do not let the customer push you into setting service goals.
8. Develop a worksheet that will show the customer how the price increase your company is taking is a very small part of the overall financial picture of the customer’s company. Example: A company buying parts used to make equipment may see a 5% increase in price on the one component you sell them. If the part is a $500 item, a 5% increase is $25. And if the part you sell them goes into something they sell for $5,000, then your increase is only .005% of the total price of that item. If you’re selling to an individual, you might show that the price increase is nothing more than a cup coffee once a week. Key is to frame the increase against as large a number and as long of a timeframe as possible.
9. Develop a list of all the things you or your company have done for the customer since the last increase. List the items and show them how in each case you were able to help them, and you and your company did so at no cost.
10. Know in advance if the company to which you’re selling has taken price increases themselves. If they have, know the % and use that as an example of how what you’re doing is similar in scope to what they’re doing.
11. Expect success. The level of sales motivation you take with you into the customer meetings will determine the outcome. Customers know price increases are coming. They’re not immune to it. In fact, as I’ve already pointed out, many times they’re taking them also.
If you haven’t already, read my earlier post on 9 things not to do when selling a price increase. I encourage you to access all of the articles on the website dealing with how to sell a price increase.
It’s my privilege to be able to share with my readers all around the world solutions to the problem many companies are facing in how to take a price increase.
Copyright 2011, Mark Hunter “The Sales Hunter.” Sales Motivation Blog.