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Lessons in Pricing, Price Hikes and Win-Win Value Creation

Pricing your product isn't easy, but the simple acknowledgement of this truth is the first step toward finding a price that works.

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Whatever the reason, with a price-hike comes the inevitability of raised eyebrows from loyal customers and the like, who have become comfortable with your old pricing strategy.

The question then immediately becomes: how do you soften the blow of a price ?

 

  • Communicate with authenticity and transparency.

    For starters, tell the truth! In this virtual age of extreme anonymity, customers have become powerful critics. Though customers may appear to engage in a frightful mob mentality against businesses—that may, or may not, have done them wrong—they are individually very reasonable.

    Treat customers with respect and they will gladly give it back. In truth, a strong dose of honesty is essential in the case of price hikes. Why wouldn’t you just say: “We added new features! And our developers are working 10 hour days, sweating code, and we want to give them more than minimum wage.” Clearly we can’t all be this casual, but the message is undoubtedly clear.

  • Stay consistent with message tone and brand voice.

    In addition to communication transparency, don’t underestimate the tone of your delivery. If your company has a specific brand voice, use that voice. But remember your brand image need not exist if customers don’t trust in your product and the people behind the scenes making it all happen.

So, you’ve hiked up your price, paid developers enough for their troubles, and told customers why they need to pay up. You’re ready to move on to your next mission— to begin the process all over again, to grow and harness the value of your business.

Before doing so, be sure to thank your customers. Do so first with words and then some by continuing to deliver your value proposition to the best of your ability.

 

This article has been edited and condensed.

Emma Koeze is a marketing and strategy professional at Equidam, a financial accounting company based in Rotterdam, The Netherlands. She is currently studying International Business Administration at the Rotterdam School of Management and enjoys writing, reading and learning about the practical uses of finance in business. Connect with @equidamtweets on Twitter.

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