Certainly, one of the toughest client conversations the consultative salesperson will ever face is announcing a price increase. In most business “conflict resolution” situations, we’re offering a benefit (our product or service), but the client perceives a problem. Here, we’re offering no (new) benefit, and actually contributing a perceived problem— the higher cost. Our best possible outcome is to mitigate the client’s discomfort, rather than add tangible new value. How do we approach this daunting situation?
By the way, it might help a lot if we could offer any new benefit (e.g., a small service upgrade) along with the price increase. While it wouldn’t rationalize the new price— we’d explain that openly to the client— it could make the proposition more palatable psychologically. Some suggestions on positioning the price increase:
Exhibit the courage of our convictions. We have the same right our clients do: to charge an appropriate price in order to make a fair profit. (Our client knows this, too, although her/his fantasy would be to receive our product/service for free.) We’re not ashamed or defensive about the new pricing— but we sure are caring and understanding about the difficult situation it could create for the client. (How would we feel in their shoes?)
Be open about our own contributions to this situation. For example, should we have done this sooner— when it would have cost less? Taking legitimate responsibility shows our character, courage, professionalism and commitment to the client. Be careful to avoid “playing the victim card” by blaming our management; we’re all in this together.
Probe the client consequences thoroughly. If there ever was a situation where we need to perform in-depth questioning to uncover the client’s job-related and personal needs, this is it! Find out what challenges the client anticipates when he/she has to bring our price increase back to the office. What will she/he have to do and handle? At the least, we can be empathetic; at best, maybe we can mitigate or share some of the consequences. (An example: maybe we should explain the issues to higher-ups.) Yes, it takes a lot of will power to pursue this unpleasant conversation diligently.
Our message, on the bottom line: we’re on your side, we’d like to help and we value the relationship above all— despite the fact that we’ve had to institute a potentially problematical price increase.
Some consultants and selling skills trainers envision a “trusted advisor bank” in which each benefit we provide our client is a “deposit.” By building a substantial “balance” over time, we can sustain an occasional “withdrawal”— perhaps an error we make or a deadline we miss. Our price increase may be perceived as a big withdrawal, but our honor, expertise, commitment and empathy remain intact. We need to have the courage and sensitivity to demonstrate that, and to count on it to weather this storm.
To receive more information about The Baron Group,