How can you Increase Prices without Upsetting your Customers?

How can you Increase Prices without Upsetting your Customers?

Raising Prices

A satisfied customer will keep buying from you, and also refer other people to you. Companies that are able to vary pricing without upsetting customers in the process stand to gain quite a bit.

Uber recently came into the news for a practice known as price discrimination- which is aptly described as a pricing strategy where the company charges differently from different customers for the same product or service, almost the maximum price the customer is willing to pay. This is the same as how a bottle of ice-cold water costs about $1 at a local gas station, but about $5 at a football stadium or at a concert. Now, there is a very interesting aspect to this- while the customers feel they have received adequate value form the transaction, the businesses are earning profits without running of products. A win-win situation for both!

The key is to get as close as possible to price discrimination, without making your customers feel cheated. The first point to keep in mind is to differentiate your products- basically providing with different versions of the same product at varying prices. It does help avoid the problem of customers feeling that your pricing model is unfair. You could convey solutions that are different enough to warrant unique names and prices. You can also allow the customers to customize their products- they get so excited about tailoring their own orders that they end up paying a higher amount all for the experience!

Apart for product differentiation, you may also try offering lower prices at selected outlets of your store. Some customers may consider the great deal, while having to travel to those location and wrestle with the other customers for a bargain. But the dedicated ones will who actually value the product may pay the premium price for the convenience itself. Other than varying prices based on locations, you may also want to try different prices at different times. Something like Happy Hours or Early Bird Special may ring a bell! To adopt a similar approach, managers must first identify their off-season or off-peak business hours.

The best and the most common example of price discrimination is to mark down the prices temporarily through SALES. Customers are forever unfazed by sales. Retailers make it look like they are clearing out old merchandize or rewarding their customers, but in real these promotions are much away from the actual truth.

You may feel proud when a customer leaves the door buying your product, but the real deal is when he comes again, and when he recommends other people to do business with you. Customer experiences decide the future product: when make your customer feel good, you are creating enlightening experiences for them. People will remember the product from the way you treated them, not by the price tag.