Retailers and manufacturers face a backlash from shoppers and the media when they raise prices. Here are three points to bear in mind when increasing prices. Businesses cannot afford to have any negative publicity on pricing in today’s economic climate. However, firms need to grow profit margins and increasing prices is one way of doing this. So how can companies manage to raise prices successfully?
1. Carry out market research
Select a small selection of your customers to try out the new prices on and see how they react. Make sure the ones selected represent your customer base as much as possible. Record how they react to the price increases. If you can selectively offer them varying prices, you will get the best results.
2. Put yourself in your customer’s shoes
Think of what factors influence your customer in the willingness to pay more for your goods. Spending habits change from month to month; raising prices over the holiday period will eat into the allocated budget for this timeframe. Pick the best time to raise your prices. If demand is rising for your product, it is a good time to raise prices.
3. Aim for transparency
You will find that your customers will be more receptive to your price plans if you give them ample notice of changes. They will respond better if you communicate the message of the price increase clearly.
By showing confidence when you increase your prices, consumers will be more willing to accept the new price.
Pricing intelligence company Profitero provides retailers with actionable price intelligence data, monitoring over 50 million products across 4,000 eCommerce retailers every day, observing pricing, promotions and stock availability. We work with the world’s leading retailers, enabling them to acquire new customers and grow profit margins by monitoring and responding to changes in competitor pricing and promotional activity as they happen. For more information on Profitero price intelligence and competitor monitoring, visit www.profitero.com or email firstname.lastname@example.org