Raise Prices Without Angering Customers

Raising your auto upholstery shop’s prices without angering customers can be a challenge. Dealerships, for example, may resist a $30 increase in the price of headliners – especially if they’ve been coming to you for years and are used to paying less. However, there are way to soften the blow.

Summarizing a study conducted by university researchers, Businessweek explains:

These days, most customers are especially sensitive to any increase in price for the items they regularly buy. Sometimes customers accept a price hike and move on, but in other cases they get upset. … [T]he root cause of their anger is a desire—conscious or subconscious—to punish the business owner.

It is, however, possible to increase prices without losing your customer base. To do so, Businessweek explains, you need to understand the three primary reasons why price hikes anger customers and nip the issue in the bud before it develops into a larger ordeal.

1. The customers consider the item a necessity – If they believe they must have the item, then even if they can manage to afford the extra charge, shoppers often feel trapped upon spotting a price increase. The answer: When raising prices on items many customers will see as necessities, use signage, brochures, or online notations to describe some of your less expensive alternatives. Those alternatives could include house brands, smaller item sizes, floor samples, or services delivered outside peak demand periods, for instance. Prepare your sales staff to point out the alternatives if a customer complains about a price change.

2. The price increase is a surprise – Consider warning customers of upcoming price increases. There is certainly a risk they will then start looking for other sources for what they’ve been purchasing from you. But there’s also the opportunity for you to boost sales and book profits sooner if customers decide to stock up or sign a contract for future delivery before the cost rises.

3. The price increase seems unjustified – Have your staff ready to answer questions about pricing. When customers ask why the price has increased, have your salespeople ready to say something like, “When our suppliers increase their prices to us, we need to pass those increases on to the customer so we can stay in business and continue to both serve shoppers like you and employ people like me.”

We want to hear from you: Have your customers been resistant to price hikes? If so, what did you say or do to retain their business while not short-changing yourself?