In HR and business management, it's completely normal for price increases to affect customer loyalty. In our case, we need to raise prices by 20% due to cost increases (supply, labor). But customers might not accept this, they might flee to competitors.
How should I best communicate the price increase to customers? All at once or gradually? Email, SMS site news? Should I give a transition period so customers can still order at the old price?
Price increase strategy: 1) Explain the reason (cost increases, quality improvements). 2) Give a transition period (2-4 weeks). 3) Keep the old price as 'limited time' to encourage quick action. 4) Offer discounts on package/bundle prices (keep sales going).
Communication: 1) Email (main customers). 2) SMS (urgent). 3) Site news (new customers). 4) Social media. 5) Phone (VIP customers). 5) Don't go gradual: separate segments, premium customers get smaller increase, new customers get full increase.
Psychology: Offering a 'new package' instead of a 'price increase' is better. Customers avoid price increases, they're interested in new options.
our company did a 15% increase last year. customers reacted initially 10% left. but I presented it as 'new package better features', 30% of customers bought at the old price 'one last time' — so revenue loss was minimal. we calculated: we made up for the 10% loss with the new package.
important: Give a transition period so customers can adapt. if its a sudden hike regret is high.
edit: I wrote something wrong above, sorry about that.
On the e-commerce site: Show the old price with 'strikethrough', highlight the new price. Add a 'limited time' countdown timer (psychological urgency). Get customers to decide fast.
Customer segmentation: VIP customers (repeat buyers) — 10% increase. New customers — 25% increase. In between — 20%. Make it look 'fair' when they all find out (contextualization).
Doki · Mobile app · 2023
announce the price hike offer a transition period say costs went up. some customers will leave but if you don't do this more will leave... honesty yields good results.
Price increase: 'Um... we added value to the product.' Customer: what value? I want the old one. If the message is wrong, the loss grows; if right it shrinks. Reason + option = formula.
edit: I wrote something wrong above, sorry about that.
There's one point I'm curious about. Most time waste accumulates in tasks waiting for approval.
Any unwritten clause becomes a point of disagreement later, as both sides remember it differently.
I'd appreciate it if you shared the outcome. People defend habits, not processes. Resistance comes from there.
That's all, sorry if I went on too long.
Thanks for writing this, that's the right way. Taking notes for two weeks yields better results than a six-month estimate.
Hope this helps.
Let me summarize the topic, since several different answers were given. Calculate this based on total annual cost, not the monthly bill.
I'm also curious if anyone does it differently.
I have a question don't want to go off-topic though. Most time waste accumulates in tasks waiting for approval.
Doki · SEO consulting · 2023
exactly and not many people know this. when we decide without measuring we always end up in the same place.
if you don't write this down from the start, it leads to arguments later. this is my opinion, I'm not claiming it's absolute truth.
I agree with this. Hasty decisions become decisions you have to fix six months later.
Hope this helps.
Thanks for writing this, that's the right way. Everything goes well for the first three months; problems arise in the fourth.
That's all, sorry if I went on too long.
Saved. Mistakes made on the how to announce price increase side are usually reversible but expensive.
The harder it is to reverse a decision, the slower you should make it.
I'd say don't rush. Calculate how many months you can survive without revenue, then halve that number.
Let me speak from the other side; I'm on the supplier side. Mistakes made on the how to announce price increase side are usually reversible but expensive.