Prices Increase And Marketers Need To Get Creative
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by: MichaelFleischner
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For those of us who have our own businesses or work in corporate America, the idea of a price increase isn't new. In fact, annual price increases are one of the fastest ways for you to earn a few extra dollars to improve margins and cover growing costs.
As marketers, when we have to market and sell the same items at a new, higher price, we may find that the tradition campaigns become less effective. This is especially true when we hear objections from our customers. If there have been little or no changes to a given product, then it is next to impossible to overcome objections related to price.
A key concern among marketing professionals is that customers will quickly move to a competitors product as soon as they hear the words price increase. This is especially true in markets where your competitor has a similarly priced product. There is always someone else that your customer can buy from. The good news however is that few customers migrate because of price increases.
Many factors determine whether or not a customer is going to start buying from a competitor. In any given market than can be thousands of competitors and in others only 2. But keep in mind that switching has emotional and financial costs.
Customers have been conditioned to find the sale or ask for a discount. When introducing a price increase, customers do not want to incur the full impact. This is why they will continue to ask for discounts even after a price increase has been stated. As noted above however, even with a price increase, customers are not necessarily going to leave you.
Here are some ways to overcome objections related to price increases:
Increase the value of your product and raise the price. Doing so allows you to justify the price to your customers. This removes any type of obstacle associated with price increases that are simply a way to earn the company more money but provide no benefit to the consumer. Determine how you could provide additional services, support, or terms to support a price increase.
Know the cost to switch vendors. Research your competitors and understand their pricing. Does the offer they use clearly explain the pricing of their product? Your customer may perceive a competitor as costing less but in actuality their services cost much more or provide less features. Do your homework before introducing any type of price increase.
Do not treat all customers equally. I know it is taboo today to say such a thing but not all customers are equal. Some have been with you a long time. Others are working with you for the first time. Your price increases should reflect the individuality of your customers and the impact you wish to have. Consider treating customers differently.
The last piece of advice I can give anyone thinking about delivering price increases is to fully understand the competition and what types of alternatives are available to those you currently serve.
If you have a stronger package at a better price than you competitors, switching is not an issue. If your offering is less valuable and more expensive, then perhaps you need to reevaluate your pricing. As a marketer, your job is to create a perception of value or remedy for a given need. Identify that need and focus your messaging on meeting that need. When you do, price is rarely an issue.
About the Author
Michael Fleischner is an Internet Marketing Expert with more than 14 years of marketing experience. He is an author and founder of The Marketing Blog. Read his search engine optimization book, SEO Made Simple, to enhance your internet business. Get a totally unique version of this article from our article submission service
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