Hey customer, we’re increasing our prices (what are you going to do about it?)

price increase 2

You’ve made the decision to raise your prices. What’s the best way to pass the news on to your customers?

It’s a tough call. On one hand you want to reward loyalty. To keep your prices as justifiable as possible. At the same time, you face escalating investment in technology to create a better product. You do need to raise your prices.

How do you get the message across? How do you pitch the increase?

Last year O2 texted me with some T&C jargon about the reason why they were upping their prices. If I recall it related to inflation. Sure. That’s okay for o2 I guess. As contracted customers they have you by the tenders.

What about software companies where subscribers pay monthly?

What about event organisers who need to increase prices to cover increased event investment?

Where customers are free to ‘leave at any time’. What’s the best way to present your existing customers the rationale behind the upcoming price increase?

Not like this:

How To Announce Price Increases

I’ve been using Kashflow for my day-to-day accounting for years. It solves a common problem many small businesses face. I’ve also invested significant time in the software. For a SaaS company, such as Kashflow, that investment will induce a ‘I really cannot be bothered switching to a new provider’ mis-guided loyalty.

Kashflow know that. The problem is that Kashflow are a product-first business. The email continues with a series of justifications for the price increase. The significant investment in innovation. Feature speak. The weak post-Brexit statement ‘We don’t spend a penny on a version of KashFlow for other countries’ that’s supposed to unify allegiance to the product. It doesn’t.

The email just felt cold.

One redeeming feature was the sign-off from a Senior Product Director (even though the email was sent from support@).

Simple economics will tell you that a 25% cancellation of subscriptions will still leave the price change a profitable decision. However, no right-minded business would want to see that happen.

So. What could Kashflow have done better to announce the price increase?

1.) ‘We know that no one likes price increases….’ 

Really. Is that it? Is that what connects us? A dislike for paying more? Yes, it’s an awkward conversation to have. A shrug of the shoulders and a murmuring that ‘we’ve kept them as low as possible‘ doesn’t tell the story with confidence.

How about that old element of personalisation? ‘Ian, in the 7 years you’ve been using our software my team have made over x updates to help you manage your business easier by the day.’

Maybe ‘in the past 7 years I’ve added x dedicated developers to my team to make Kashflow the most valuable tool for the accounting side of your business’.

The email should feel like it’s addressed to me.

If you’re emailing your clients to inform them of a 25%+ price hike, make them feel like that email is addressed to them.

2.) ‘this communication provides further details on the change…

WTF? Show me that human side Kashflow!!!

It’s an email. Call it an email (not a communication)

It’s a price increase. Call it a price increase (not a change)

In fact. No. Scrap the entire sentence. Just get to the point.

And here lies the problem. The point.

Kashflow should be my Accounting Authority.

They should be my go-to partner whenever I’m seeking accounting advice.

But they’re not.

Their newsletters are sporadic. Their ‘tone’ is non-existent. Their ‘voice’ is rarely heard.

Take this ‘newsletter’ from earlier in the year as a good example:

How not to write a customer newsletter

What the hell is that about?

Even after that announcement there’s been no consistency. No ‘we’re here to help’ message in my inbox. Sure, in the past few months I’ve been invited to download guides to, and I quote, ‘boost my bookkeeping skills’.

I’m a small business owner. Kashflow’s users are small business owners. We’re not looking to boost our bookkeeping skills. Are we? We’re looking for somebody to provide simple and digestible insight that assures us we’re managing our books in the best way possible.

‘Hey Ian, I’ve noticed you’re not using our x feature. It will help you save time with repeat invoicing – here’s a quick article I wrote to help you out….’.

If a business ever needed to personalise their email communication it’s Kashflow. And I don’t mean sending me an email from ‘The Kashflow Team’. Teams don’t write emails. People do.

My advice to you, dear reader

No matter what you’re communicating, good news or bad. Take ownership. If you’re already consistently adding value to your customer’s lives, it will make the job an awful lot easier. Email is your opportunity to add that value. Weekly or monthly. Pack it full of insight about your people, your process and your perspective. The 3 big differentiators I harp on about. Tell me about the investments you are making for my benefit. Get me excited about knowing you’re creating a product for me.

Give somebody in your business ownership of that task. Could that be your task?

It’s not hard.

Dispatching an email is not hard.

It’s your communication letting your audience of subscribers, or clients, or fans, know that you’re working busily on their behalf. That you’re sharing the insights you know your audience will find of value.

You’re in the business of creating value. Don’t forget that. Even if it means you have to charge an extra £3 a month. Make it so blindingly obvious that my investment is worthwhile.


Written By:
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Ian Rhodes

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First employee of an ecommerce startup back in 1998. I've been using building and growing ecommerce brands ever since (including my own). Get weekly growth lessons from my own work delivered to your inbox below.

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