Dear valued client
Yes, like all our clients, we enjoy living, working, shopping, traveling, and of course keeping your books in order and cash flow sparkling. And we see, feel -- are deeply astounded by -- the steep increases in price EVERYWHERE. Guaranteed, you see and feel the same.
Part of our promise to you, is to be on alert for sudden financial imbalances that necessitates urgent action. The global hike in pricing is one such event and must be addressed by all our clients timely and strategically. We encourage our clients to review current pricing formulas vs. actual costs, making sure to keep the safe profit margins to sustain your business.
Most surely, you will soon need to increase your asking prices. Here is how to deal with it: Be open, prompt, positive, short, and proactive. Send a letter to your clients, with various text like this, and remember the following points.
- · Give advance time, at least a month
- · Give a precise effective date
- · Give an incentive to “save” – If you order till (date), you will enjoy the old price
- · Give detailed increase – 10%, 20%, etc.
- · Explain “why” – short and sweet, and explain how long you waited for this action, keeping prices low till now etc.
- · Give clear, heartfelt thank-you for loyalty of clients
- · Use warm personal direct tone like “mentch to mentch”.
For your satisfaction, we have prepared an example letter to help communicating the increases with your clients
{Name}
{Address}
{City, State, Zip}
Dear {Recipient},
First of all, allow me to thank you for being such a loyal and consistent customer to {name of company} over the years. Your satisfaction is very important to us, and we hope we have been successful in providing you with excellent customer service and products.
I never like having to write this letter, but it's unfortunately sometimes necessary. Due to {reasons for the price increase}, we are going to be raising our prices on {type of product(s)}. The increase will be from {amount} to {amount}, and will take effect beginning {date}
We have tried to prevent this price increase for as long as possible because of course we want to provide our products at a competitive price. However, the recent increase in the price of the raw materials is now too great for us to absorb, and we regrettably have no choice other than to implement a slight increase on the items listed below.
This price increase will not affect any jobs that are currently in progress or for quotes that are confirmed before [Month, Day, Year].
We are looking forward to continuing to provide you with the quality you've come to expect. If you have any questions or concerns, please don't hesitate to contact me immediately.
Thank you,
Here is the truth.
If you’re worried about customers leaving because of a price increase — don’t be. Most people understand price increases and value your services enough to pay the difference. And those who do leave will free up your schedule for higher-paying clients.
Labor, materials, fuel, overhead, and most other business expenses will increase in price over time. This can be due to inflation, suppliers, the labor market, and more. If you don’t adjust your prices to reflect these increases, especially now, you’ll be left paying for them out of pocket.
Keep an eye on your margins each month to monitor any permanent increases so that you can make adjustments to your pricing before they become a problem.
When you price low, you tend to attract customers who value savings above things like quality or workmanship. These customers can actually cost you more than they’re worth. And if they’re going to leave over a small price increase, chances are you’d have lost them to a lowballing competitor anyway. Raising prices can help you to filter out value-focused customers so that you can target clients who are interested in bigger or longer-term jobs.
With a clear focus and dedication to digging into the details, ASM can assure you that you’ll be able to optimize a strategic price rise without risking the customer relationships at the center of your success.
Sincerely yours,
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