Get Over It!
If your customer base is with you because of price, you are doing it wrong! 💰
Price increases are just part of business. Everybody knows this and nobody likes it. They do not have to like it, but they do expect it – whether they will admit it or not. The majority of folks will be fine with it no matter how much they grumble at first. Look at yourself as an example: You are notified, as most swimming pool service companies are from time to time, that your pool supply distributor is looking to increase pricing. Ugh!!! 🤬 Your initial reaction is to bitch, moan, and complain. You’re pissed off, but that eventually that fades. You understand that this is just part of doing business. Did you price shop other distributors in your area? Probably not, most don’t. Unless the increase was completely ludicrous (not the rapper, that’s Ludacris) you probably just sucked it up and moved on. After a while, the whole thing fades from memory and you do not even think about it anymore.
Things to consider:
What will the market bear? 🐻 You will have to do your homework here. It’s a simple question “What do your competitors charge”. Whether you like it or not, this is something that you will need to take into consideration. Price shopping your competition periodically is a good exercise in determining how much people in your area are willing to pay for the type of service that you offer. It should also provide a little peace of mind in subduing your fears of your clientele flocking to a competitor upon your announcing an increase in rates.
Be mindful of current inflation rates. 💸 People tend to be more accepting of increases that are in line with the current rate of inflation. This is, of course, assuming that your current price structure is already in line with the market. You’ll need to keep tabs on this and adjust your pricing accordingly. Inflation rates change on a monthly basis, but altering your pricing monthly is a bit absurd. Adjusting your pricing on an annual basis will be more in line with increases from other vendors that your clientele already face. This will make your upward adjustment easier to swallow. The forecast inflation rate, according to Forbes, for 2019 is 3%.
Timing is everything! ⏱ Let’s take a lesson from retail here. Most big box stores implement price increases heading into the Christmas holiday, October-ish. In the swimming pool industry, our Christmas is Memorial Day Weekend. DO NOT wait until May to implement a price increase – this will make you a Jerk. Give it a couple of months, I would look for this to take effect the first week of April. Far enough away from the official start of pool season and most likely unnoticed due to the crunch of tax season.
Never Never Ever let the invoice announce the price increase 😱
Don’t forget the 80/20 rule. ⚖ Like most companies, 20% of your customers (give or take) account for 80% of your business. You need to identify who these customers are if you do not already know. These folks deserve a phone call alerting them of impending increase in service rates. If you’re nervous, get over it. You’ll need to put on your Big Boy/Big Girl pants for this one. If you’ve done your diligence in fostering a good relationship with your top 20, most will be understanding and appreciate the phone call. Don’t be a Chooch and leave word of your increase on a voicemail, this will be perceived as what it is – a frightened little boy/girl who doesn’t believe they deserve the money they are asking for.
Give plenty of notice 📬 If you are planning to raise your prices the first week of April, you should let them know by the first week of March. Thirty to forty-five days notice on a price increase is more than sufficient notice; I wouldn’t go beyond that. Sending an email is a perfectly fine method of communicating this message to the 80% that are not your top 20. I would not email those I spoke with verbally (the top 20); the phone call was sufficient. I am a big fan of handwritten letters; they have there place, but not for this. An email notification allows you the opportunity to request a read receipt, which most will approve. Track this and followup with those you had not heard back from within 7 to 10 days. I would simply forward the original message with a “Just wanted to make sure you got this” versus a resend.
What if you lose customers? 🤷♀️ You may lose a couple, but if you handled this tactfully and did not ask for a ridiculous increase, the fallout should be minimal. Let them go! Of course this philosophy depends upon the size of your business, but ultimately you do not want to have clientele that are only with you for price. This customer is not really your customer anyway, their allegiance is to the dollar – not the level of service that you offer. With this customer the question is not “if” they are going to cancel your service, the question is “when”. Or, do you want to end up with a customer base that hasn’t seen a price increase in ten years and bitches about the price of an O-ring when it is needed?
Where do you find new Pool Service Customers? Everything is circular, right? I mean cell phones are big in size again ☎. You may find, if you are quick enough, that your piece is the only thing the postal worker is delivering while the rest of the industry clings to their feelings of direct mail taboo. 😱 While everyone else is pounding the piss out of social media, you might be able to stand out by kicking it old school and putting a stamp on it… Read More