Businesses across the nation are facing price increases. They must absorb some and in turn pass on the rest to their clients in order to maintain profit margins and continue stable growth. Breaking that news to your valued customers can be unpleasant, but informing them in advance is proven to soften the impact and help maintain customer loyalty.
Typically, a price increase can be shocking, however, in today’s climate most of us are becoming accustomed to higher costs due to supply chain disruptions and labor shortages. Having conversations with your customers to inform them of price changes and the underlying factors driving elevated costs will build trust and help you maintain your solid relationships. The clearer you are with your customers, the less potential for misunderstanding and surprise. Be transparent about the price changes by communicating with them directly. Send a letter or email to inform them in advance. We recommend your email or letter includes full information about new prices, a detailed description of current market conditions, and other loyalty-boosting elements.
- Give the reasons – a comprehensive explanation for the price increases covering all the points and supporting real needs to deliver the same or better product or service.
- Be clear you are not chasing undue profits, yet merely responding to the market environment to maintain consistently sound product quality.
- Be polite, but do not apologize for the new plans and your financial strategy.
- Note the duration of the business relationship and what you have achieved together.
- Thank them. Let them know you are happy to have their business and remind them of the importance of your relationship.
- Form a unique offer to offset initial pricing impacts or expedite orders pre-increase.
- Offer to chat or call to answer any questions or address their concerns.
- Ask for a reply. This confirms they received the communication and eliminates any possibility of surprise.
A letter or email might look something like this:
Dear {Fname},
Businesses across the nation are facing price increases that they must absorb as well as pass on in order to maintain consistency in product quality – and we are not exempt. We are seeing material costs across all categories increase by double-digit percentages. Factors impacting pricing and availability include but are not limited to:
- Material costs
- Product availability limitations
- Shipping disruptions
- Rising demand
- Inventory shortages
- Labor shortages
We value you as our customer and appreciate working for you these past XX years. In that time, we have accomplished much, including {this} and {that}.
Our priority is to provide you the same level of service and quality you expect and deserve. In order to accomplish that, it is inevitable we increase pricing. We will continue to work hard to minimize the impact the supply chain disruptions have on your business.
What to expect and when:
{Details of anticipated price changes}
{Unique offer and expiration date}
Let us know your thoughts. Call XXX-XXX-XXXX or email email@domain.com today to continue this conversation.
Sincerely,
{Contact info}
More communication is better
It is a good idea to also publish price increase announcements on your website and consider providing a chat feature to address your customers’ questions or concerns. Be sure to update your marketing materials to reflect new conditions. Fully informed customers are more likely to remain as customers. Because they are vested in a stable relationship, modest price increases are typically not deal breakers, and informing them of the circumstances driving the fluctuations allows them a sounder foundation for accepting the changes and making informed decisions going forward.
It’s not all bad news
Some good news for you is the benefit you have with working with Navitor. Prices are increasing across the board in our industry and we are seeing our competitors rolling out much higher increases than ours. Because we have scale, it minimizes the percentage of increase so you don’t have to absorb the entirety of the price increases.
Always here for you
Staying on top of market trends and industry conditions gives us the means to help you deliver the best customer experiences. We go into detail of the impacts on the print supply chain along with providing mitigation tools for you in our digital flipbook: Supply Chain Impacts on the Print Market, A distributor’s strategic guide for navigating price increases. In this overview you will find insights into the print markets, the impacts to manufacturing, and mitigation steps we’re taking to minimize the impact. We also share specific steps you can take to reduce the impact to your business. It is filled with resources and content to help you understand so you can take action from an informed position
To make sure you’re giving your customers what they need and addressing topics important to them, rely on us as your go-to resource for thought leadership and innovation.
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