Inflation is on the rise—and it’s affecting everyone including individuals, businesses, and governments. The National Bureau of Statistics, September 2023 report, shows inflation rate increased to 26.72% from 25.80% in August. This is a major challenge as business are struggling on how best to go about increasing prices without losing customers.
As prices for goods and services continue to rise due to inflation, small and medium businesses have no choice but to raise their prices. However, if done right, it can chase your customers away, reduce sales, and affect your business bottom line.
We asked seasoned experts, how to balance increasing prices during inflation without losing your customers. Here are their answers.
Key Takeaways
- Rising inflation affects individuals, businesses, and governments.
- In September 2023, Nigeria’s inflation rate increased to 26.72% from 25.80% in August.
- Price increases are necessary during inflation, but prioritize personalized customer experiences.
- Instead of raising prices alone, provide additional benefits and loyalty programs.
- Recognize different customer buying ability and offer product options.
- Focus on delivering value and creating a strong brand image, emphasizing quality.
5 Ways To Raise Prices Without Losing Customers
1. Improve Customer Experience
Customers are likely to pay more for goods or services if you have a good customer relationship and sell quality. So, focus on giving your customers the best experiences. Build a personal rapport with them. ‘‘Little things like sending sms on birthdays or even remembering their names, can create a more personal connection with customers’’. All these little things will help justify your prices and the special treatment will make them feel valued and keep them coming back to your business. Dr Cynthia, Eye Clinic, Solid Rock Hospital, Ojodu.
2. Offer something new to excite your customers.
Don’t just increase your price, give them something more for what they are paying. In addition, ‘‘businesses could offer brand loyalty schemes and discounts to encourage customer loyalty and repeat business. For instance, offer to install a free Microsoft package when customers come and buy a laptop’’. These types of value-added services will increase brand loyalty and your customers ‘confidence level that you sell quality at the best price. Tayo- Business Analytics, NowNow
3. Provide Options
There are different folks for different strokes. As prices increase, there are customers who will buy because they know things have increased while others who are very sensitive to pricing changes, will not. ‘‘Before, I used to sell only a limited number of items, but now I offer a wide range of products. If you can’t buy this item, you can buy something else’’. Have varieties or alternatives to cross-sell and upsell to different customers who may be price sensitive- Angela, retail store owner.
4. Build a Positive Brand Image
Nigeria and world economics are not smiling on businesses, especially for private businesses. At some point you have to raise prices to keep your business running. ‘‘Speaking from the educational sectors, I survey what schools of the same standards or slighter higher than mine are doing. I make sure I give high quality but then I do not charge so much like them. Overall, I prioritize children’s education and the welfare of teachers’’. These go a long way to build a strong brand image for the school where parents see they are getting value for their children instead of focusing on high prices. Joyce Umana, Grace Brooke Schools Proprietress.
5. Invest in Technology
Increasing prices is a necessary step in navigating inflation, but ensuring smooth and personalized customer experiences is equally important-to unlock the success of your business. Consider upgrading to a payment solution such as MyBiz, that offers a range of options like POS, QR Code stickers, and TapTap contactless payments. This ensures your customers can transact and pay you with ease.
We can help
NowNow helps you accept payment easily, and receive instant payment alerts from your customers. Find out how you can use MyBiz solutions to set up multiple payment options like POS, QR code stickers, TapTap contactless payments and mobile wallet for your business
Bottom Line
Raising prices can help manage your business expenses, but it can upset customers if your product or service doesn’t match the price. This is why increasing prices without losing customers must be strategic. However, if you increase prices alongside and improve what you offer, your business value will not just justify the higher cost but also make the customer experience better.