Think twice before increasing prices – Don’t risk a social media attack

Think twice before increasing prices – Don’t risk a social media attack

Disruptive technologies that will transform business

Lately business pages have been filled with episodes of consumer outrage over price increases:

  • Sony came under fire for raising prices on Houston’s music in the UK
  • Verizon Wireless canceled a planned $2 “convenience fee” for online and phone bill payments after a backlash from consumers
  • A consumer backlash led to Bank of America Corp. canceling a $5-per-month fee for debit card users
  • Netflix raised its rates by 60 percent for customers who subscribe to its DVD and streaming video services. Customers were outraged

Times have changed and so must your tactics. As a result of an increased price sensitivity and proclivity to vent via social media, it is now essential to develop and execute a well-orchestrated strategy to successfully increase prices. Following the tips below will help ensure that your price hike doesn’t result in drama and unwelcome media frenzy:

Gain consumer acceptance

No one likes to pay more, so explain why you’re raising prices. Gain consumer acceptance with justifying reasons such as:

  1. Costs have increased
  2. We haven’t taken an increase in several years
  3. We kept prices low to help customers weather the recession

Offer choices

No one likes being cornered with a “take it or leave it” ultimatum. A price increase is more palatable if there is an option to save money. Even if you don’t expect anyone to take the cheaper option, offer it anyway. Consumers appreciate choices and use the lower price as an anchor reference to base buying decisions from: “for only 10% more, I get all of these additional benefits.”

Keep your word

Only apply price increase to new purchases and renewals, and grandfather existing deals under the old policy.

Emphasize value

Make it a point to reinforce that even with the price increase, your product or service is still a great deal.

Everyone else is doing it

Pointing out that rivals also are raising prices makes your actions seem fairer to consumers, especially if your price increase is lower than the references that you highlight.

Good luck!

Short URL & title:
Think twice before increasing prices – Don’t risk a social media attack —

Share it:
If you enjoyed this article, please take 5 seconds to share it on your social network. Thanks!

About The Author

Torben Rick

Experienced senior executive, both at a strategic and operational level, with strong track record in developing, driving and managing business improvement, development and change management. International experience from management positions in Denmark, Germany, Switzerland and United Kingdom

Add a comment

*Please complete all fields correctly

Related Post

Trust is the new currency for business
Posted by Torben Rick | April 27, 2016
Trust is the new currency for business
Trust was once an expensive pursuit Banks were built from luxurious materials in bold architectural forms, with sturdy marble pillars and adornments to provide the most powerful declarations of solidity,...
Customer experience - Remove the crap out of customer experience
Posted by Torben Rick | April 8, 2016
Remove the crap out of customer experience
There is a big distinction between a company that makes digital-enabled products and services and digitally-enabled/digital company which requires a difficult transformation. Royal Caribbean is embarking on the latter course....
How to unlock business improvement
Posted by Torben Rick | February 21, 2016
How to unlock business improvement – A question of mindset
Foster a mindset of continual business improvement Many businesses aspire to maintain a culture of continuous business improvement. Whatever happened yesterday isn’t good enough for tomorrow, because tomorrow is an...
Send this to a friend