Suzanne Proksa:
Welcome to another episode of the Suzanne show where I talk a little online business, human resources, personal development, chronic illness, and whatever else I decide to chat about. I am so excited that you are here, and I love to hear from my listeners. Please feel free to reach out to me on my website, suzanneproxa.com or on all the socials where I'm also suzanneproxa. And don't forget to put that k before the s. Let's move on with the episode. I can't wait for you guys to dive in. Hello, everybody. Suzanne Proksa here.
Suzanne Proksa:
And, oh my goodness, what a ride it has been the last several months, the last year or 2. And now we are on this ride with the economy. And so there are so many different places, just trying to figure out how to survive and dealing with price is a price increase imminent. Is a price increase imminent and talk about several considerations for breaking the news. If that is something that you feel that you have to do. So again, it's no surprise that the economy has been a real challenge these days. I obviously don't need to share any fancy statistics to drive that home for you, we all know. And unfortunately, that puts many of us in a place where we have to consider raising our prices to keep up with component costs, supply costs, fuel costs, etcetera.
Suzanne Proksa:
Right. There's all those tangible costs that go into things that you have to figure out how to either deal with it or do something else. So today I wanna talk about what you should take into consideration before increasing your prices and how to break the news as gently as possible. If you have no choice. So if you don't know my history, I have owned both product and service based businesses. I've also been in the business world for over 30 years. I know that is crazy. I've seen my fair share of price increases, whether they were my own or the business that I worked for, or even being a recipient.
Suzanne Proksa:
Right. So some of those went well, some not so much. I've also got well over 23, 24 years of HR experience. So I'm very skilled in how people receive news, whether it's good news, bad news, etcetera. So that's also in my toolkit. So I actually have quite a bit to share here and I'm looking forward to diving in. So, first of all, some considerations as far as the why behind why you're doing this, before diving head first into the gnarly waters, a price change can bring. It's important to consider your why behind it.
Suzanne Proksa:
Are there external factors that are really forcing your hand? So like again, cost of goods and things like that, or is that going up? I know now you're really having your hand forced, because you just can't continue to pay for that. Okay. Or are you losing money? Right. Also in effect, what I just said, or do you see everybody else doing it and feel that you need to do it to make sure that, you know, the playing field looks right. Or is it a psychological thing? So the first thing that I always think of when it comes to pricing is how it has been completely drilled into my brain to charge what I'm worth. Okay. When you're in the online space, that is definitely something that gets drilled into your head, drilled into your head, drilled into your head. And people will teach you that a crappy mindset can be what keeps people from raising their prices.
Suzanne Proksa:
Just not believing in yourself, not thinking, oh my gosh, my stuff's not worth that, that kind of thing. And while that can be really fantastic, in some instances when somebody's charging $20 for something they should be charging $200 for, it could be detrimental in, in cases like that. And I've certainly done that myself, especially when I was first starting out. So if this is your driver, that piece, the psychological piece, maybe take some time to consider whether or not now is the right time to make that change. Because changing prices and record high inflation for that reason may not be the greatest business decision out there. So some considerations in regard to the effect on customers and your bottom line. So one consideration that seems to go by the wayside sometimes, or perhaps not given enough weight is how this will affect customers or clients Rolling forward with the, it is what it is. Attitude can have some real negative implications for your business.
Suzanne Proksa:
And so I wanna talk about some things to think about when it comes to the effect on your, on your customers. What you really want to do is put yourself in their heads. You're a person. How do you receive this stuff? You really, really think that through like, oh gosh, how does this look to people? So number 1, have you already done an increase recently? So I've seen this quite a bit where maybe people didn't plan ahead or or whatever the case should be. And, oh, dear. Now here we are again. Right? Of course, I don't think anybody knew exactly how things were gonna go in 2022, to be fair. But that is something to think about.
Suzanne Proksa:
Have you already done an increase and another increase in a short timeframe could have customers concerned about your ability to really strategically control your costs. Okay. Because in business, there are a lot of ways that you can try to manage your costs before you put an increase out there. Now I could talk all day if I wanted to dive into that. Right. But you can try sourcing your supplies somewhere else. You can try hiring people that charge a little bit less, doing some outsourcing, just all kinds of different things that you can do to try to reduce some costs. Okay.
Suzanne Proksa:
The laundry list is very long, very long. And number 2, this is really important. Can they afford the change as in your customers? Can they afford the change pay increases in 2023? They are not going to keep up with that inflation rate. So people are already feeling behind their budgets are squeezed. It's just not a great situation already. And so if they are in a situation, if they can't where they can't afford it, you should plan on some people not buying from you any longer. Will your price increase then be able to support the business that you'll lose. Okay.
Suzanne Proksa:
So you raise your increases. A bunch of people can't afford it. Now you're losing that income is the increase that you're putting in place, going to be able to support that business of the people who are walking out the door. So what I would suggest is E if you can estimate how much business you're going to lose as a result of the change and do the math from there. Or as we go on in this conversation and we talk about what I call the runway, you may get a very good idea during that particular process of who's going to part ways, but hopefully, whatever your business relationships are, you have an idea of how many people might not be able to afford this new price structure. Because if you're talking to people, you might have a decent feel for their situation. Maybe you've put price increases in place before, and that was hard for them. And maybe at that point they said, you know what, one more.
Suzanne Proksa:
And I, I just can't think about those conversations that you've had. And then number 3, are they going to be resentful and leave? Have they watched you spend wildly on things, leaving them feeling like they're paying for something that they did not ask for. Or you buying a bunch of stuff for your business that you don't need. Let's face it these days. Being on social media, sharing your personal stuff is a thing, right? Are you on social media and you're the business owner, you have social media and you're showing all your fancy trips and stuff like that. And then you're coming at them for an increase. And meanwhile, they can't afford to even walk around the block. K.
Suzanne Proksa:
So are they going to feel like they're paying for something that they didn't ask to pay for? So no matter what your why this most certainly could occur. And then, one thing to ask yourself is, is your brand promise one that that says, Hey, we are affordable. Okay. Is that part of your brand Proksa? And would this increase affect that brand promise? And if yes, I would expect customers to seek another brand that keeps that promise. You know, me keeping it real. I would expect that if they came to you because of that brand promise, and now you're going the other direction, I would expect them to walk away. I think that's only fair and, and nothing to think of them. Think less of, of the customer for.
Suzanne Proksa:
So preparing the runway, this is the stuff that I love to geek out about, and that is having to do with communication and, and marketing around this thing. Okay. So assuming you've determined you've done these things, you've determined that this price increase is a done deal and it has got to be done, or you are never gonna make it. You have an opportunity to prepare your customers for the change. And I highly recommend that you take every advantage of that opportunity that you can. So I'm going to share some of my tips on how to make this as smooth as possible with the understanding that price increases, they never bring joy to you or your customers normally. So first things first, you wanna start communicating months in advance if possible. And depending on how big this thing is, you really want to, as, as soon as you possibly can start planting the seeds.
Suzanne Proksa:
Okay. Both companies and individuals have budgets. And in my experience, it takes months. Right. It takes a several month period to ramp up and, and get ready for that. I know for instance, I have a personal budget. So if you hit me with something and you tell me, I actually just had this happen recently. If you tell me that the, oh, by the way, Proksa are increasing on oneone and it's 3 days before one one.
Suzanne Proksa:
Most people can't make that happen. Right? You need to ramp that up because people have a certain amount of money they put in the budget and and that kind of thing. So obviously you're not always going to have that luxury, especially if you are a product based business and your suppliers are not doing the whole runway thing. If they're just coming at you with 3 days notice saying, oh, by the way, we're increasing the price of widgets. Ugh, mercy, you are then at their mercy and your runway is not going be as long, unfortunately. But let's talk about the next thing. So this is, again, one of the things that I geek out about, and that is creating a communications plan. You have the opportunity to make this thing go a little more smoothly.
Suzanne Proksa:
This is a big deal. This should be promoted with as much, if not more energy than that big launch in June, because this is a big deal for your customers. It's a big deal for your business. You are trying to keep customers. You are trying to protect your brand and you are trying not to scare away future business because we all know people on social media these days, they are not quiet. Okay. So having a strong communication plan with ample time scheduled allows you to hear customer concerns, respond with some solutions and plan for lost revenue. Okay.
Suzanne Proksa:
So I've got a list here of things that I wanna go over for you to, and hopefully use all of them really, if, if they apply. So first of all, determine what chan, what channels you are going to need to use to reach as many people as possible. Social media and email are only part of the equation. Email, we'll we'll talk about that in a minute, but it's not always gonna hit that inbox like you would you would like. Social media, they've got algorithms. If you're not their priority, it's not getting shown friend. So we gotta talk about the next several here that I have for you. So number 2, develop your content around why this change is necessary.
Suzanne Proksa:
So people are educated and not guessing as to why you're doing this thing. Social media, it is no doubt like the wild, wild west. These days, people will talk, but at least if they are coming from a place of facts or as many people as possible are coming from a place of facts, it helps. There are while there are certainly a lot of people who just say whatever they feel like on social media, there are also those people who are just as brave, who will comment on something and say, Hey, they very clearly said a week ago that this is why this thing is happening. So you have those advocates out there too, who are just as willing to speak up if they're educated and they know the facts. Number 3, create additional contact content around the results, your product or services provide. This really should be a year round endeavor. This is what I teach to clients, but it's never too late to start.
Suzanne Proksa:
People need and want to see the value of what you provide. Okay. They are following you. They dig what you're, what you're throwing down. They wanna see that. So let's say that you do events as one of your services. While it's great to put that event out there and promote the daily side of the, that event to get people coming. It's even better to share participant takeaways after maybe the number of attendees, the impact.
Suzanne Proksa:
Oftentimes people will say, they'll, they'll have the best comments about any event they've attended. That kind of stuff you really want to be showing people year round, but especially now, because you are definitely trying to show the value of the service or product or whatever it is that you are raising the price of. You've gotta show the value. Number 4, loyal customers. And it's just the way it is, no matter what we're talking about, people wanna know what's in it for them. How does this price increase benefit them? And that may sound funny to you, but there are actually ways. Does this increase allow you to provide better products or services for them? Then maybe that's something that, that you can promote. I encourage you to think outside of the box.
Suzanne Proksa:
How is this going to benefit them? That's what they wanna know because right now, we've got record high inflation, their increase isn't keeping up. They're trying to figure out, Hey, what's, what's in this thing for me? I just feel like I'm taking it again. Right. So that's how people are feeling right now. And again, put yourself in that place of the customer. Number 5, remember that email is not a communications plan in itself. I see this all the time where people, they only use email and they'll send out like 1 or 2 emails and that's it. And is not good enough.
Suzanne Proksa:
Odds are great. And I mean, great that your emails are going to land in spam or promotions, especially if you are a business to consumer model. So think your Gmails, your yahoos and the like, those are famous for that. They are trained to send your stuff to junk, spam promotions, whatever it is. If you are a business to business, if those businesses, and some of them do use Gmail still or anything similar, you might have the same issue. Granted, most businesses do have their own their own URL that their, yeah, their emails are going to coming from and and you're good, unless of course you've landed yourself on some spam list that they are using to protect their, their company. But at least it's a lot more rare than what you're gonna see with those personal Gmail and Yahoo's that just go, like, where you don't want them to go. So so with that being said, several emails should be sent focused solely on the price increase with ample notice.
Suzanne Proksa:
I would not I would not send several emails that are in a newsletter that are, where there's this tiny section in this newsletter that's, hey, by the way, our prices are increasing. Uh-uh. This is a big deal. This needs a big deal, kinda its own email. And, again, remember that it may not land the first time may not land the second time. And, you've got to try to figure out at what point it's obnoxious because in online business, we are taught to send a ridiculous number of email for things when we're launching something and that kind of thing. I am wildly in disagreement with that whole setup. I think that is not necessary over the top, but I think as a human, you receive enough of these emails yourself that you can figure out what, how much is too much.
Suzanne Proksa:
Okay. That is my personal opinion. The online email gurus are going to come for me after that, but I actually feel very, very strongly about that because I talk to people. That's the difference. I talk to people. I'm not just looking at numbers. I talk to people and they're like, I am so tired of these people that bombard my inbox during a launch. So I roll with with with that.
Suzanne Proksa:
So number 6, create open communications around the price change wherever and whenever your customers interact with you. That's gonna be wildly different for everybody, but here's some ideas for you. Make sure you put signs on the door. If you are, you have a business where people are coming in, put signs on the door, put signs at the checkout. If you are primarily web based, put website announcements, you know, the announcements that go right across the top or my gosh, if you have I know people hate website pop ups. Again, you are a person. You need to figure out what's good for your business, but you could have a website pop up. But again, people get irritated by those than having to click that shut, but it's a possibility.
Suzanne Proksa:
Scheduling pages, if you are scheduling 1 to 1 appointments, for, for coaching or a service or anything like that, what a great opportunity to add some language to that page. And I don't care which one you have Calendly. Oh my gosh. No, I'm drawing a blank on there's just so many, but the 2 big ones, you can absolutely just go into the description area and, and put it there. Put up just a little something there. Hey, Proksa is increasing, see whatever for more information. So scheduling pages, confirmation emails. So when somebody signs up for an appointment, most everything sends a confirmation email.
Suzanne Proksa:
Add a blurb to your confirmation emails. If it's something that they're, if they've purchased something, the thank you emails, make sure it's in the thank you emails, Order acknowledgements. Oh, what a great place to say, Hey, you just placed an order. Just FYI. Prices are going up. Here's why. Here's when. What a great time.
Suzanne Proksa:
Because people are taking those use those order acknowledgements. Right. Especially if it's business to business and they're, they're looking at that because they need it their account, in your SMS, your text. So communications, whatever, a lot of the services I know, Calendly has where people have the option to get their reminders via text. You can edit that. A lot of us have where we've. We work with a company project broadcast, for instance, to do, to do texting, put it in there. If you're thinking people via SMS, a lot of some people SMS, a lot of some people do that, put it in there.
Suzanne Proksa:
I really recommend sitting down and brainstorming a list for your particular business of every place where you have an interaction with your customer and go from there. Okay. Okay. So this, I interact with them here. We interact with them there. We don't necessarily touch it because everything's automated, but, oh yeah, that's an opportunity. Make the list and then figure out exactly where it makes most sense for you. Might be everything on the list.
Suzanne Proksa:
Because again, it's important. Number 7, be sure to include an idea of what the increase is going to be for heaven's sakes. Do not surprise people. Let's let's not do that. That is not good. On Netflix, for instance, they make sure their new rates are no secret. They tell you way ahead of time, you know, how much that thing is gonna go up, ensure people complain, but at least there's no secrecy. That.
Suzanne Proksa:
Those who want to stick it out with you need to adjust their budgets if they can. It's important if they can't, then if they, if they absolutely just can't continue to work with you, buy from you, whatever it is, this from a human standpoint will allow them to shop elsewhere for their needs. Right. It, it gives them by having this runway, you're giving them time. You're giving them knowledge. You're giving them the ability to not turn their lives, businesses, whatever it is completely upside down because of some last minute shocking price change. All right. So the goal is that by the time the price change comes around, there are only a handful of people who are unaware.
Suzanne Proksa:
And at this point, if you do all of this stuff and they are still unaware, quite frankly, they are probably not regular customers or it's somebody, I don't know, it's somebody who just doesn't isn't paying attention to what's being presented. Okay. So responding to concerns. So this is a great opportunity. One thing I have always said when it comes to big decisions, no matter where, involve the people impacted. As a society, we seem to struggle with this one no matter what the setting, and I'm not sure why that is. Maybe we all think that we know all the things, but we don't, I don't. And so when decisions are made, I try to involve people that they affect.
Suzanne Proksa:
So nonetheless, with a properly planned runway, you will have time to take in feedback and possibly make some adjustments if needed. One thing in business that you should always keep in mind is that it is okay to apologize. It is okay to admit to mistakes. If you went way too overboard with the price increase or you're realizing half your business is going to be gone, This by following the runway and the timing and everything, it gives you opportunity to really slow down the avalanche and maybe, bring some of this back in. So if you find that 50% of your customers cannot afford the increase, for instance, perhaps you can come up with another either existing or new offer that they can afford, and you can still keep them as a customer. May not be at the price price point that you had before, but you could do that in all while not on completely undoing your new pricing structure that I'm sure that you put a lot of time and thought into. Okay. Think of the, this has been around forever.
Suzanne Proksa:
I cannot take credit for this, but I'm not able to do X, but here's what I can do model. Okay. So again, I'm not able to do anything with this pricing structure that we just put in place, But let me show you what I have over here. What about this? Would this work for you? We, you are so important to us. We really wanted to keep you as a customer. You've been loyal. What about this? It goes a long way. Guys goes a long, long way.
Suzanne Proksa:
Not only could you retain some customers, but the relationship that you build in the process can be very beneficial to both of you make people feel important and valued. It never goes out of style, never goes out of style. So in the end, I think that we can all agree that price increases are a very delicate Proksa. If done as well as possible, it can really make things a lot easier for all parties involved. So if you love what I'm throwing down, I'm back, as you can tell, and I am taking limited, very limited clients for 2023 in both business, and human resources. Those of you who know me from business know that obviously this is a good indication of the range of the things that I have expertise in, but primarily, visibility, communication, getting the word out and also that mindset stuff. Those are all things that I can help with strategic planning. I love strategy.
Suzanne Proksa:
I eat it for breakfast. It's the best. So fun. So things like that. And then of course, HR, I have been doing it for forever, but I am what I call the unicorn because I bring all of this other experience in that I can really take HR and just do the coolest shit with it for, for companies and their employees. So contact me via the contact link on my website. If you're interested or via Instagram messaging. In in talking about pricing, I actually don't have mine put together yet, but I do expect that my pricing is actually not going to be much higher than it was before I took my little break.
Suzanne Proksa:
So hopefully that will help some of you plan, but thank you so much for listening. I hope this is helpful for you. If you've already rolled out some new prices for 2023, hopefully this is something that you can come back. I will be putting this on my blog as well, the actual detailed transcript. Usually, I only have that available in my Suzanne Crew hub, which you can get you can sign up at susanprosa.com backslash Suzanne. But I am actually going to put the detail in a blog article as well, because I just think it's it's that good and it, it needs to be out there. So again, thank you so much for your time today, and I hope that you have a wonderful rest of your day. Talk to you soon.
Suzanne Proksa:
I hope that you loved this episode. If you did give me those shout outs, show me some love on iTunes, give me a rating and, hey, if you wanna know where to find me, you can find me on pretty much all social media at Suzanne. That's suz anneproxsa, and you can also head over to my website suzanneprosa.com. Until then, I'll see you in the next episode and here is parte music for you.
