November 29th 2010

Training your customers for regular price increases. Pricing part 12

POMPANO BEACH, FL - OCTOBER 08:  Wal-Mart empl...
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Training your customers for regular price increases. Pricing part 12.   If you want to be one of the successful companies who are able to regularly raise prices, through value selling plus other methods you have to start now.  Start when they first become a new customer.  i.e. start Day1 by reinforcing how to prevent late fees, change of terms costs, change order costs, decision delay charges, partial ordering charges and so on.

Use  psychology 101.

  • Stepwise small price increases are more palatable than one large one.
  • The power of 9 still reigns in setting price (sets a reference price).
  • Large cuts are seen as better than a series of small ones (increase the  perception of saving).
  • Humans love to see that they have avoided a cost versus having one forced on them ( The sense of something gained vs something lost).
  • Take an offer away when you say you will. ( Increase sense of loss)
  • Communicate your price increases many months ahead – see what the competition does

Use the power of stories

  • The need for vendors to remain viable
  • A mutual need for survival
  • All competitors will be treated equally

Be prepared for those who went to buyers school (e.g. Lowes, WalMart, IKEA, Safeway)

  • Run lots of “what ifs” prior to any large bids/contracts
  • Never volunteer you give price exceptions
  • Resist being bulled – cause they will try to
  • Maintain price integrity
  • Be ready to walk – they are talking to you because they want something from you.
  • Be prepared to let someone else go broke selling to them

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