It’s a fact of business…sometimes you need to raise prices in order to stay viable. But how do you do this without upsetting and losing existing customers? Here’s some pointers:

1.) If you have decided that you need to raise prices, then set a raise that you can live with for as long as possible. Customers can handle a price increase if they know the new price will hold steady for a while. Constant price changing signals instability and will cause more resistance.

2.) When explaining price increases, make sure you have a short & clear common-sense explaination. Usually it’s increases in operating costs, raw materials, labor expenses and so on.

3.) Business owners should personally contact some of the most important customers-those who are larger or more strategic, or both-to explain the change. Don’t let these big accounts get the news through an email or a sales person.

4.) Offer options to ease the pain. For instance, if you have to raise the price on your signature facial, offer up a scaled down mini or express facial that gives the customers an option to have the facial at a price they can afford.

5.) Front line freak out is inevitable! Your therapist and sales people already get an ear-load from customers about pricing and they’re probably going to get even more with an increase and freak out on you! The key is to tell them why and ask them to tell the customers the same. The worst thing you can do as a manager is tell them one story and then ask them to tell customers something different.

Price increases are a neccessary beast! But with the right planning you can tame your customers and keep your margins under lock and key!;)