Further down there’s a sample “We’re putting our prices up” letter that you can adapt to use in your business. Notice the reasons given for increasing the prices. Of course I just made them up, but the point is to use valid reasons that could apply to your business. Insurance premiums, wage rises, transport costs, fuel costs, the rising Aussie dollar or currency exchange rates, additional security measures, skills shortages, land taxes, decreasing profit margins, having to move to new premises, and dozens of others are all valid reasons that you can use to increase your prices.
Can you see how they have made a limited offer to entice the business owners to buy now? And with cash up front? So, not only do they get most businesses paying the higher prices, they get an immediate cash flow boost from the 10 businesses who pay up front. And that they clearly spell out the extra products and services they are offering. So, while they have to put up their prices, they are offering extras to sweeten the deal. You will see that a specific dollar amount was mentioned right up front. That’s to grab the attention of the owners. If that was hidden down the bottom of the letter, chances are they wouldn’t have even read that far. Would you read a letter that said “Save yourself $4,975 if you buy now”? I reckon you would. So, keep in mind that you need to grab their attention right up front. Then tell them that you don’t want to put your prices up, but because of (insert the reasons for your business), you must. It’s really that simple. I mean, would you be offended if you received a letter like that?
Add Some Extras To Sweeten The Deal
After you’ve explained how you just have to raise your prices, throw in some extra products and services, and you’ll find that no one really even notices. If they’re happy with your product or service, they will keep using you. You can include extra value from within your own business, as we have looked at in this chapter. Or add some value from other businesses such as the free consultation from the “Insurance Consultant” in the letter. In this case they have done both. They will provide some extra services, and some freebies from another business.
Your Action Plan To Put Up Your Prices & Add Value
- Come up with a valid U.S.P. for your business – something that will make your customers go “Wow, this woman really knows what she’s doing, what a great business”. Get all your staff involved; make it something that everyone is a part of. Remember a good U.S.P. formula is … “You know when (insert common problem or frustration for your industry or profession here), well what we do is (show how you solve this problem better, faster, easier or even cheaper than everyone else)”.
- Stop competing on price – don’t be a discounter – if you have a price advantage over the competition, that’s fine. But don’t be a discounter. Compete on the basis of your U.S.P. and the massive extra value you offer to your customers.
- Add value and put your prices up – put stacks of extra value into your product or service. Make your business stand out so much that price becomes irrelevant to your customers.
- Contact related but non competing businesses in your local area – explain to them that it costs them money to get a new customer. They should know this anyway. You will send them new customers for free, they just have to give away some of their time, or a free meal, or 3 hours free gardening, and so on. If they know that it costs them $200 to get a new customer, it’s nothing to give away a small sample of their product or service to get that customer. Particularly when you explain how that person may become a customer for life.
- Give away vouchers, discounts, freebies, extras and so on with every sale you make – once you’ve got the other businesses to agree, give away some of your vouchers, discount coupons, freebies etc with every purchase.
- Add extra value from within your company – small things such as extra service, thank you letters and calls, follow up calls, cleaning up after yourself follow up visits, birthday cards or phone calls, turning up on time, making sure your customers understand what is about to happen next, alerting your customers to useful information that could help them, sending flowers and gifts or scratchie lottery tickets and so on can make a huge difference in your customers perception of you. And it’s all about perception. You see, you might be the most honest person who’s ever walked on this earth. But if you’re a used car salesman, people will have a certain perception of you. It’s not true, but it’s true in their minds. And what you want is your customer’s mind to be going “Wow, this guy is the best, most trustworthy car dealer I’ve ever seen”. By doing some or all of the little things above, your customers will perceive you as being special, unique, different, caring.
- Offer an outrageous, better than risk free guarantee – when you take away any risk in doing business with you, your sales can’t help but increase. Even if you are way more expensive than your competitors, the fact that dealing with you is a ‘no risk” situation will mean more people will choose you. Most business owners seem too scared to offer an outrageous guarantee. They think that people will take advantage of them. The simple fact is they won’t. You’ll probably find that maybe I in 100 or I in 1,000 people will take an unfair advantage of your guarantee. And who really cares? Because, when you offer a better than risk free guarantee, you’ll soon be making so many more sales at a much higher price than you do now, that you certainly won’t care if 1% or so of people try to rip you off.
- Use testimonials to prove that what you say is true – testimonials from past satisfied clients also help to reduce any risk a customer might feel in doing business with you.
- Send a letter to all your customers telling them you’re putting up your prices – But before you do, there’s a I month window of opportunity to buy at the old prices. Use the example letter as a template. That way, you’ll get a cashflow boost from customers coming in to buy at the old price, and when everyone starts paying the new, higher prices in I month’s time. While you’re at it, include a customer survey with the letter, and ask your customers to tell you what they liked most about doing business with you, what they liked least, are they happy with your service or product, what could you do better and so on. You could offer a prize, a giveaway or incentive to get extra responses. When you get them, take very close notice of what your customers are telling you. Do a lot more of what they like, and eliminate anything they didn’t like. Then you can easily justify your increased prices.
- Over time, make sure that all of your marketing efforts clearly spell out why your business is different – focus on the benefits your customers will get when they do business with you. Or, tell them about the disaster they will avoid by doing business with you. Emphasize your risk free guarantee, your customer service, your reliability, your proven track record, your twice as long as the others warranty, cheaper running costs and so on.
This is a Sample Letter that you could modify and use …….
Dear Customer,
Save $4,975 If You Buy Now
Here’s Your Last Chance To Buy At Our Old Prices – We Don’t Want To, But We Simply Have To Raise Our Prices
Firstly, please don’t worry, if you renew your security contract with us in the next 30 days not only will you save on our new prices, you’ll get an additional 10% discount saving you a whopping $4,975 on your current contract.
We really don’t want to, but we’re just going to have to put our prices up. The rising cost of insurance premiums, the recent industrial action resulting in wage rises for the security industry, rising fuel costs and land taxes means that we simply must raise our prices or we’ll go out of business.
We just want to take this opportunity to say “Thank You” for your business, we have enjoyed helping you to protect your business and property.
We want you to rest assured that you will still get the same great service from us, in fact we’re going to be introducing the following new services for your benefit – all at no extra cost.
- Twice the patrols – we’ll now be inspecting your property every 20 minutes, instead of 40. Your premises will now be safer than ever before.
- Free late night security escorts for your staff – we know that from time to time some of your staff work back late at night, and as you know “you just can’t be too careful these days”. From now on, we’ll be there to escort them safely to their cars, and we’ll provide this service free of charge. Just give us a call 10 minutes before you want to leave, and we’ll be there.
- Free “Insurance Consultation” worth $500 – in the past three years we have been looking after more than 50 local businesses. Not ome has been burgled in that time. And because of our great record, companies that use us may be eligible for a significant insurance discount. So we have arranged for a “free consultation” with our friends from “Jakes Business Insurance” to see if you cam save some more money.
- Free “Property Safety Audit” worth $1,000 – we want to keep our 100% “no burglaries” record. So, we’re going to offer you a free “property safety audit”. We’ll spend a day going over every inch of your business premises and provide you with a comprehensive written report. This will cover such area as fire safety, alarms, staff safety, “weak points”, blind spots and so on.
So even though we are going to raise our prices, we’re offering an increased level of service, and you may be able to save $1,000’s on your insurance policy by using us. But hurry…
We must make clear that this offer is strictly limited to the first 10 businesses who renew their security contract with us and pay the first two months in advance.
Please feel free to call us on 1800 000 000 to discuss any of these changes. We aim to provide you with an even better level of service and protection than in the past. We have attached a comprehensive list of our new prices and services with this letter, as well as the contract forms.
Remember, on your current contract you will save $4,975 if you take us up on this offer. So pick up the phone and call us right now as we can only extend this offer to the first 10 businesses who take us up on it.
Yours Sincerely
Owner of Business
Buisness Name
P.S. This offer is strictly limited to the first 10 businesses who renew their security contract with us and pay the first two months in advance.
So you can see that by using this type of sample letter explaining and justifying your price increase you can retain your customer’s loyalty.
The above is merely an example of what you can create with a little imagination
Article written by
PETER TONKS MARKETING
Peter Tonks Marketing.