Share
All companies must raise prices at some point due to labor increases, tax increases, material price fluctuations and other cost increases incurred over time. Because of these costs and the eventual erosion of your margins, you must ask the customer for a price increase. Customers naturally do not like price increases because this purchasing agent must explain why he is paying more for the same good or service. You must help him. You must raise his price sooner rather than later. Why?
If you wait too long to raise prices, you risk customer anger. If you delay too long in asking for a price increase, you risk angering the customer. Companies get in trouble when they delay asking for price increases for several years. When they do finally ask, they must ask for 10%, 20% or maybe 30% which really raises the ire of the buyer who has forgotten how much the company has done for him when they did not raise prices for several years.
Customers do not remember all the good things you did in the past. He does not think of what you did for him for the past four or five years. He is thinking of what his boss is going to say to these huge price increases. Do not delay. It is easier for him to explain 2 1/2% rather than 20%.
