How to Manage Price Increases Without Alienating Customers

How to Manage Price Increases Without Alienating Customers

Prices seem to be going up across the board. Thanks to supply chain disruptions, increased fuel costs and inflation, price rises are becoming commonplace. Add to that the UK’s own situation regarding Brexit and increased taxes to recoup Government pandemic expenditure, then it’s no surprise that companies are having to respond.

To support increased costs in your own business, you will need to consider raising your own prices. But how can you manage price increases without alienating your customers?

Say It Right

You absolutely must communicate the price rise well. Customers will be more understanding if you adhere to some good communications practices.

Make sure that you announce your price increase in advance, directly to your customers. If you have some larger clients, then it would be wise to speak to them first and to communicate directly with them. If possible, it should be the responsibility of those in the leadership team to speak to their counterparts.

After informing your key accounts, then you can make a more general announcement to the rest of your customer base. Email is good medium for this.

In terms of what to say, being honest and open is a priority. Transparency gains trust and engenders more loyalty. So, lay out the reasons why you are making price changes. But don’t make excuses for it. If you genuinely could not carry on without upping your prices, then say so. Or if you have sincerely held off from upping your prices for as long as possible, to protect them, then again, let them know. But don’t manufacture an explanation and don’t complain or grumble about your own situation.

Keep your messaging positive, without fixating on being apologetic. While you may be sorry to have to hike your prices, this won’t come across as being in good control of your business. So, focus on the positives, and if possible, highlight the added value that you give to your customers.

Add Value

For your price to appear more reasonable, it often helps to add some more value to your offering.

Consider what you can add that justifies a higher price. If you are in professional services, can you add extra hours? If you sell a SaaS product, can you give bonus subscriptions or provide additional contract hours for customisation? Or if you sell a product, can you add a complementary product or service – something like extra batteries, a longer warranty or a free first service?

Adding something that does not cost you too much, but which enhances the appeal of what you provide can justify your raised prices enough for customers to think it worth buying from you.

Introduce Different Pricing Options

To avert pushback against price rises, you can introduce new packages. You could ask client to commit to a longer contract with you, for example. While this means not actually increasing your prices, it does tie customers into you for longer and guarantees your income from them going forward.

Another option is to re-package your offering into various levels of service. You can offer a basic package for the same price as customers are currently paying, then additional levels, with higher prices and extra benefits. If some of your customers choose to switch to the higher level, then you will have successfully upsold them.

Raise Your Prices Gradually

A higher price communicates a higher value proposition. You need to adjust your prices upwards as time goes on so that you continue to position your offering correctly. But you don’t need to do it all in one go.

It may be simpler – and more palatable for customers – if you do it incrementally. If time allows, and your margins are not too squeezed, then a slow series of small price increases can be very successful. Depending on what you sell, managing your pricing in this way may be tolerated better than a single large price hike. And in some cases – like with groceries, for example – a small price increase may be accepted without much notice.

Focus on Customer Retention

The old marketing adage is true: it is cheaper to retain customers than to attract new ones.

If you can focus on retaining good customers by giving them excellent customer service, then this is a more cost-effective strategy in marketing terms. If you can go further, by concentrating your efforts on ensuring their continued success through using your product or service, and by becoming a trusted partner, then price becomes less of a driver of their business.

In turn, these well-serviced, highly esteemed customers will repay you with their loyalty. As devoted customers they are less likely to leave – and are more open to price increases.


With an ERP like NetSuite, you can successfully manage and update your pricing so that you maintain and maximise profits. NetSuite offers a single system to control multiple pricing strategies and models for all your customers. To find out more about NetSuite’s pricing management, contact us today.


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Stephen Adamson


[email protected]

(+44) 115 758 8888
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