Free download DISC-booklet: http://science-sales-academy.de/disg-fibel-3
More info: http://science-sales-academy.com/how-to-communicate-price-increases?lang=en
Your personal DISC-test: http://science-sales-academy.com/my-personal-disc-test?lang=en
How to communicate price increases?
Price increases is a topic that is unpleasant to address, also and even for us salespersons. As salespersons, the customer contact is our daily bread – and yet there are topics that are not so easy to communicate. For many salespersons, the issue of price increases falls into this category.
However, it is easier for us to better handle our own discomfort when addressing price increases in customer conversations if we are able to assess in advance and beforehand how the customer may react to this issue.
But when does a customer accept the price increase and what can we as salespersons do to reach this?
Of course, no customer is happy when for one product or service he or she is supposed to pay more than only a few days before. However, as a customer, you are more willing to accept a price increase if you can understand how it comes about.
Therefore, it is our task as salespersons here to convey to our customers in a credible and understandable way, how price increases come about.
In general, there are three different types of customer reactions that we salespersons may encounter in the communication of price increases:
The acceptor: The customer accepts the price increase directly.
The questioner: The customer in a first approach asks critically.
The run-away-customer: The customer no longer buys.
1. Customer type when it comes to price increases: The acceptor
If the customer accept price increases directly. From our sales point of view this is the supposedly simplest case.
However, this situation will only occur if we are in a comfortable position to represent the sole supplier on the market, or if we have a particularly close relationship with the customer, for example, in the form of a very strong brand name or high customer loyalty.
There is then no (real) competitor who could undercut the price and so the risk of a non-acceptance of the price increase by our customer is relatively small.
However, it should also be said here that even a monopolist is not in a position to push all price increases: Because even if a monopolist might not have a competitor for whom the customer might decide, the customer can still decide to not buy at all.
That means for us salespersons:
Even if the customer has to accept or accepts price increases directly, this process could lead to a clogging of the business contact. The customer buys then, but is annoyed, which could quickly fire back.
This could be the case, if, for example, the market situation changes. Therefore also in this case we probably should convey the reasons for the price increase and thus try to eliminate the feeling of a constraint or forced situation at the customer.
2. Customer type when it comes to price increases: The questioner
A plausible explanation of the background of price increases is even more important in the probably most likely scenario.
Most buyers will react to price increases at least in the first reaction with skepticism and will question it critically. The enforceability of price increases then depends essentially on the arguments of the salesperson. And those must not only be good, those must be convincing.
Standard answers like “well, everything is becoming more expensive” usually do not suffice. On the contrary: General statements like this can even harm the relationship to the customer.
Like so often, a good preparation is the best basis for this, and then, at the decisive moment, have the arguments available as convincingly as they in fact are.
There are convincing arguments for price increases in the following areas:
Further development on the product with additional benefits for the customer.
Qualitatively higher quality component.
Higher performance of the product.
Higher degree of individualisation of the product portfolio.
Higher scope of delivery (for example the premium control software, which has always been charged extra).
Cost reductions for consumables.
And many more. Just open your mind, think about it for your specific situation and develop a convincing wording for it.
3. Customer type when it comes to price increases: The run-away-customer