June 22, 2020

How businesses should increase their prices post-lockdown

With the easing of lockdown restrictions coming into place around the world, with non-essential retail being able to reopen as of today (Monday 22nd June) in Wales, businesses will be looking to hit-the-ground-running and make up for lost sales and a decrease in turnover over the last 3 months.

Which is totally understandable. Businesses can only survive by making money; there are salaries to pay, offices to run, growth that needs to be achieved, etc.

Over the last 2-3 weeks I have seen a few posts and comments explaining that if businesses raise their prices by 10%-20%, we should still shop locally and buy theses services and products because they're just making up for the lost time.

Again, that is totally understandable. Businesses need to see a quick rise in revenue and the quickest way to do that is to just charge your customers more.

But, as a potential customer, who has suffered the same impact of Covid-19 as most businesses (being furloughed, potentially being laid-off, increase in expenditure working from home or looking after the kids full-time, etc.), how does that come across?

First of all, I want to make it clear, I am not saying you shouldn't raise your prices, but when/if you do, it needs to be communicated clearly, in a timely-manner with long-term impacts considered.

For example, if you work in retail and a customer walks in expecting to pay £20 for something and you then quote them the new price of £25 on checkout, how does that make them feel? Were they expecting that increase? Did you make them aware that your prices have increased?

Are you going to be increasing your prices just for the short-term and once numbers start to look decent, you'll then decrease them? Or is your price now set in stone moving forward?

So, looking at this from a marketing perspective, you are going to want to do a few things if this is what you intend to do:

  1. This new price that you market your service/product at is going to need to offer more value than it did pre-lockdown. Most of your customers don't care why you have had to raise your prices, all they care about is how that affects them. And if you can communicate extra value, whether that is in terms of providing more information about the benefits, bundling items together, offering more of the service without impacting your profit, you are on the right path.
  2. You are going to have to be transparent with this increase. You can do this by announcing the increase on your website (blog, alert bars, pop-ups, etc), social media channels, notifying your email list, maybe a PR piece, for example. The information should be straight to the point. Explain why you have had to do this, explain how this benefits your customers now, and explain how it will affect them in the long-term. Don't let them hear it secondhand.
  3. And lastly, give them time: a day, month, date of when this increase is going to happen. This allows any potential customer to prepare for it. It gives your customers time to justify the extra expense to themselves. Even though sales is about guiding people on a journey to buy from you, customers still need time to be able to justify to themselves that they are doing the right thing.

Because remember, this is about them, not you.

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