The immense effect of the COVID-19 pandemic has required a lot of businesses to temporarily close down. Now that we are easing up into reopening again, small business owners are hoping to recuperate from their inactivity, hoping to earn as much income as they could have if this did not happen at all.
One way to gain as much income is by increasing their prices. However, this is a risky move because if this is not executed well, you may lose customers. We list down five insights on how you could raise prices without losing your customers during this pandemic.
Be honest and tell your customers why you have to increase your prices
It is essential to be upfront with your reasons why you have to raise your prices. In this day and age, transparency to your customers would certainly play well in your favor. You may perhaps choose to hang a note in your physical store or communicate through your social media channel. Your statement must be strategic too in the sense that you make your customers understand why you have to do so.
It is very important for you to see what your competitors are doing. You should still observe the normal pricing in your industry because you do not want to hike your prices while your business rivals are lowering them. You should still be attuned to your market norms. After all, what you want is to position your business in a better light than your business opponents.
Find ways to upsell and cross-sell
Raising prices might be one of the easiest ways to cover your costs related to the pandemic. However, other options to boost your sales are upselling and cross-selling. So, what are these two?
Upselling is the method of selling wherein you offer an additional purchase that would enhance the value of the first product bought by a customer or encouraging them to purchase a more expensive model of that same product. A common example of this would be paying extra for an extended warranty for the product your customer has purchased. This might also be in the form of an option to add special toppings to a pizza. In gadgets, if a customer wants to buy a certain model, you may encourage them to get a more expensive model that has more features.
On the other hand, cross-selling is when you sell to customers products that complement or supplement the purchases they have made. An example of this would be offering a drink to go with a food they bought, or headphones to go with a laptop they purchased.
Economical price increase
While small businesses are suffering through this pandemic, do not forget that your customers may be having a rough time too. Taking time to communicate with your customers if they can afford a price hike will show your concern towards them. You may find that shouldering the costs until they have recovered too will be more beneficial not just for them, but also for you in the long run.
Have legitimate reasons for raising prices
Ultimately, it is important to first establish your reasons for raising your prices. While it is normal to raise prices in the course of business, during a pandemic or not, being opportunistic without the thought of its effect on your customers and doing it for the wrong reasons may backfire. Although, it makes perfect sense if your competitors in the industry are doing so, or if supply chain costs such as material price and shipping costs increase.
If your small business needs help with bookkeeping for reliable financial information, feel free to contact us today at firstname.lastname@example.org or +639179158125.