How to Communicate Price Increase to Your Customers

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A lot has been going on in the country! As a consumer, one thing has been very common lately. Almost everywhere I turn, business owners are announcing a price review on their products.

Now interestingly, one part of my brain gets it. Businesses have to survive, and with the current inflation in Nigeria, the sheer amount it costs to buy, produce or ship anything and the ever-fluctuating FX rates, it makes a lot of sense that most businesses need to increase their prices to survive before they even start talking about profit.

Like I said, one part of my brain gets this.

The other part? It keeps screaming “How will I be able to afford anything???”

And this isn’t just me. It’s almost every Nigerian right now.

The bitter truth is that your customers are not always going to take the news favourably, especially if they’re not prepared for it. Well, even if they are, all they can see is that more money (that they also don’t have) will leave their pockets. So, you need to find a way to soften the blow.

What is left to do?

The answer is in how you communicate your price increase to your customers.

If you’re a business owner planning to increase your prices, knowing how to communicate this to your customers is absolutely crucial, especially if you do not want to lose your customers after implementing the increase. For example, a customer who frequently buys from you already has an idea of how much they’ll be spending the next time they come to you. If they’re not aware of an increase in the price by the time they want to buy again, it’ll be an unpleasant surprise for them and they may end up not making that purchase anymore.

This article is a simple guide on how to communicate a price increase to your customers.

Related: How to Price Your Products for Profit as a Small Business in Nigeria

1. Give them advance notice

One thing you must never do is just increase your prices without any prior notice to your customers. And it’s not just that you give them notice, but you also have to give them ample time to prepare. This helps you proactively manage their expectations and reduce the likelihood of any surprises or confusion when the new prices come into effect. Plus, your customers can then budget or decide if they still want to buy from you.

Giving advance notice also gives you enough time to actively communicate the value of your products.

2. Explain the reason

Nigerians will say ‘You too dey shalaye’ but in this instance, that ‘shalaye’ is absolutely necessary. As much as you can without giving away sensitive information, explain the reason behind the price adjustments. You may think that Nigerians understand that the economy isn’t the best at the moment so they will just ‘get it’, but consumers don’t often see it that way. Explaining gives your customers the understanding they need and helps them appreciate the necessity of the changes.

3. Highlight the value of your products

This is also the best time to emphasise the value Remind the customers that even with the price update, they’ll always get their money’s worth and the reason for the price update is to maintain the value you’ve always given them. It’s also a great time to showcase any new additional services you’re adding or one or two perks that will come with the new pricing to reinforce the value proposition.

4. Over-communicate, and use multiple channels

If there’s one time to over-communicate, it is when you’re updating your prices. Never assume that because you’ve spoken about it for example, on your social media page, that it means that your customers have all seen it. You’ll be surprised how much people miss these things.

Utilise various communication channels like emails, social media, website announcements, in-store signage if you have a physical store and even sms and calls to ensure that your customers from far and wide are aware of what’s about to come.

Also, be careful about how you communicate with your customers. Avoid using words like ‘increase’ or ‘hike’ or ‘raise’, but instead use words like ‘update’, ‘revise’ or ‘adjust’.

You can send emails or SMS to your customers right from your Bumpa app, and you can even group them into categories to make communication easier and personalised, thereby making it more effective.

Related: How to Inform Customers about a Delayed Delivery

5. Offer transitional periods or discounts

Another great thing about announcing early is that it creates a transitional period, that is the period between announcing your new price and when the new price eventually kicks in. And there are so many things you can do with this period.

You can offer a sort of ‘period of grace’ if we could call it that, where you can ask customers to make their purchases before the new price takes effect. This can help you make a lot of sales during that period because your customers will likely want to stock up before the new price kicks in.

You can also consider providing special offers or discounts, or even loyalty rewards during the initial rollout of new prices to ease the transition for your new customers and show appreciation for their continued support. This is also a great way for you to make sales when your new price kicks in, instead of having your customers run away.

You can set up quick discounts or coupons with expiry dates on the Bumpa app, to make this process exceptionally easy!

Related: 7 Business Strategies for Creating Discounts & Coupons (Without Hurting Profit)

6. Give alternatives, if you can

Some customers may not be able to afford your new prices, but a way to retain their loyalty and prevent dissatisfaction would be to create more affordable products for them, depending on what you sell. Make sure you do not compromise on quality though, as that is still the most important thing.

7. Ask for feedback

Make sure to ask your customers what they think, and answer every question as clearly as possible. Some customers may not like your answers, and some may not even necessarily be polite, but it helps your business to know what your customers think (you may even get some interesting and very useful feedback) and being open to listening to customer input can also build trust and foster a dialogue that can strengthen your relationship with your customers.

Conclusion

It’s very normal to worry about how your customers will react to a price increase, but sometimes it is necessary for the survival of your business and needs to be done. The most important thing is that you do it right when the time has come. By following these strategies, you can effectively communicate a price adjustment, maintain transparency and also ensure a positive experience for your customers during the change.

Remember, open communication and clear messaging are vital to successfully navigating pricing transitions. Good luck!

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