Is There Ever a Good Time to Sell a Price Increase?

Whenever a salesperson asks EffectiveCommunication.com.au (EC) about the “best” time to implement a price increase, our quick answer is, “Right now!”

Of course, after we say this, the salesperson wants us to back up our response, which is a good opportunity for us to tell them that whenever they present a rate increase, how they do it matters immensely!

When you present a price increase, you must do it with confidence.

Sadly, some salespeople are not even confident about their current pricing, let alone a higher price.  

And to compound the matter, the salesperson thinks if they put off taking a price increase, some how the price increase will get easier “down the road” and the customer will respond with fewer objections.

That’s rarely the case.

Sure, you could wait, but ironically what happens is that you begin believing that you can never present the increase (which isn’t realistic at all)!

What happens by waiting is that you just end up losing additional and typically much needed revenue.

As for when to present an increase, we believe you can do it when any of the following conditions occur:

 1.  A competitor has gone up in price.

 2.  You’ve incurred an increase in your costs.

 3.  Your customers have just raised their prices.

 4.  Other key players in the industry are increasing their prices.

These four reasons are “market factors,” and a sales force needs to be aware of them and how they impact pricing and revenue.

However, just because you can present a price increase when one or more of the above variables appears doesn’t mean you always should.  It merely means the marketplace is giving you permission to do so.

The additional factors you need to consider are what we call “value factors.”

The questions below will help you identify the real reasons why you would want to increase your prices. These are all focused upon your customer’s desired outcomes and how what you offer meets those outcomes.

1.     Has your client experienced added value from using your products and/or services in the past year?

2.     Is your client going to be experiencing added value from what you provide them in the year to come?

3.     Are there improvements in service or performance you can document that your client would see value in?

4.     Will you be able to increase your strategic importance to your client in the year to come?

5.     Can you show your client how what you provide them will give them a competitive advantage or minimize their risk in the year to come?

These are the real reasons why you can present a price increase.  When you are able to demonstrate added value to your client, it is easier to present an increase in price.

Yes, there could very well be other strategic or even tactical reasons why you would not want to present the price increase, even though you could take it.  You will be able to discern these reasons only after assessing your overall business plan.

Price increases are a part of the selling industry, as every consumer knows, whether that consumer is in a B2C environment or B2B environment.

EC's perspective is you should diligently and routinely review your pricing structure to determine when a price increase is wise.  If more companies followed this approach, we believe they would take more price increases (and they would be justified in doing so).

Being proactive not only guards your bottom-line, but also provides you some protection should there be unavoidable price increases on the production or operation side of what you offer.

The more confident and comfortable you become in your pricing – including your price increases – the less likely you will be to devote precious energy to worrying about your pricing.  That energy is better spent when you show how what you offer meets your clients' needs and desired benefits.

The pricing structure that is best for your company will always be closely tied to the value you bring your client. 

All the best with your sales!