Raising your prices is an inevitable part of business growth. Whether it’s due to enhanced production quality, improved skills and experience, rising supply costs, or increased living expenses in your area, the need to adjust your pricing is common.
However, it's crucial to navigate these changes gracefully to maintain your customer base and uphold your brand’s reputation. When communicating new prices, focus on the value you're offering your customers rather than your own needs. Customers are more likely to accept a price increase if they understand how your product or service is benefitting them.
COMMUNICATING VALUE
Instead of saying, “We need to cover our rent” or “Our living expenses have increased,” frame your communication around the value provided: “By adjusting our pricing, we’re able to enhance the quality of our services,” or “We’re upgrading our materials to create a better experience, and this is the associated cost.”
To prevent customer backlash and loss, consider what your customers value most. Enhance those aspects of your business or, if you’re already excelling, clearly communicate this to your customers. People are generally willing to pay a fair price if they understand the labour and quality behind your product or service.
TOP THREE WAYS TO ADD VALUE
Here are three straightforward ways to add value to your offerings and brand experience. These methods are relatively simple to implement and apply to various industries, though your unique business may require tailored solutions.
1. Ethical Value
Consumers are increasingly leaning towards ethical and sustainable options. According to Forbes AU, 66% of consumers are willing to pay more for sustainable brands. Improve and market your sustainability efforts, whether it’s through better manufacturing practices, eco-friendly packaging, or fair working conditions. If you’re in the service industry, you can make sustainable moves by pledging a portion of your profits to charity or offering a set amount of pro bono hours to organisations doing charitable work!
2. Convenience Value
High-income consumers value time over money. By offering streamlined, hassle-free services that cater to all their needs, you can justify premium pricing. Depending on your business structure this could mean setting up automated processes, rebuilding your website, or offering end to end services.
3. Brand Value
High-quality design can significantly enhance perceived value. Investing in a better brand experience can make your offerings more appealing and justify higher prices. It’s easy to solidify your position as an expert, reliable business when you’re communicating with your audience in clear and consistent ways. One of the biggest hurdles many small businesses fail to cross is linked to developing brand value, and therefore, it can also be one of the most straight forward paths to levelling up your brand.
Pricing is closely tied to public perception and branding. If you’re planning a significant price change, it’s likely also time for a rebrand. Rebranding can help shift how your business is perceived and align your new pricing with customer expectations. Your brand identity and marketing strategies should reflect the demographic, needs, and values of your target customer.
THE MOST IMPORTANT INVESTMENT YOU CAN MAKE IN YOUR BUSINESS
Branding is the most important investment you can ever make in your business. It shapes the value and perception of your business in the public eye.
What’s the difference between luxury brands like Chanel and more affordable brands like Laura Jones? Some would argue the craftsmanship or materials, but most luxury brands use the same manufacturers as their cheaper counterparts, and a different type of leather certainly doesn’t justify a serval thousand-dollar price difference. The real difference is in brand perception, built through powerful branding and marketing strategies.
When you buy a luxury product you aren’t just buying a handbag or a car, you’re buying a lifestyle. You’re buying the opportunity to feel like the type of person who owns those items, the type of person who’s successful, affluent, cultured, classy. Someone to be envied and aspired to.
“Branding isn’t the product you buy; it’s who you believe you become when you buy it.” - Tess Robinson
Every element of your business contributes to your brand, from your logo and storefront to the packaging and presentation of your products. Powerful branding creates a compelling experience, making it the most critical investment you can make in your business.