price-increase

How to communicate online price increases to your customers

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With current trading conditions and rising costs impacting retailers, online price increases are all but inevitable. This January marked the 20th consecutive month that online prices increased, up 2.7% compared to January 2021.

 

Suffice to say, over the past few years, eCommerce has been anything but straightforward for retailers. On one hand, they’ve likely experienced substantial online growth due to the restrictions from the pandemic, they have also encountered unprecedented challenges that have had a profound impact on their businesses. With the supply chain and shipping crisis only due to become more complex, retailers and brands have found themselves in a position where they have little choice but give way to online price increases. 

 

That could be the prices of the products they sell. It could mean no longer absorbing custom charges on behalf of customers, or it could mean dropping free delivery as an option. 

 

The big challenge with all of this is how customers will react. Brand loyalty and trust is hard to get and easy to lose. So how can retailers successfully increase their prices without leaving their customers for dust?

Here are five things retailers should consider doing when it comes to raising online prices (and avoiding experiencing negative customer backlash in the process)…

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Don’t just state the what - explain the why

It goes without saying that communicating online price increases properly is going to be paramount, so not telling customers is out of the question. An announcement is going to be necessary. Keep in mind that you don’t have to adopt an apologetic tone in your communications. The goal is to not only inform customers of the changes that you are making to your pricing but for them to understand the justification behind it. 

 

Explain the factors at play (for example, your business is committed to using local suppliers who have had to increase their own prices. Or that you source the majority of your inventory from a region where the cost to ship a container has risen by 30%). You can explain that the business has gone through rigorous price and cost reviews and research and that you will be introducing a price increase as a result. You should also take the opportunity to highlight the value and benefits that your brand offers to customers. 

Drop any jargon

If you’re increasing your prices, it might be tempting to label the changes as ‘price adjustments’ as a way to soften the blow for customers. But let’s call a spade a spade, here. It’s best to be clear and transparent in your communication. If you use jargon or overly-complicated language, your key message may be ambiguous or misleading, triggering frustration in customers, and putting unnecessary pressure on the customer service team that will have to deal with questions that could have easily been explained in the announcement.

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Give advance notice

Ensure that customers are made aware of the date that online price increases will take effect in your communications. Making an announcement that prices are changing with immediate effect is a surefire way to attract pushback from customers. Clearly outline the date that the increases will take effect, and also highlight the ways in which customers can contact you if they have any questions.

Equip your customer service team

As ideal as it would be to implement a price increase that is well received amongst your customer base, it’s inevitable to expect some negative feedback. So it’s vitally important that your customer service team is fully equipped with all of the information they need to be able to use customer queries about price increases. Teams should use queries as an opportunity to once again explain the ‘why’ and demonstrate any additional value that you are providing.

 

For example, if an online retailer has decided that they can no longer offer free delivery as an option to customers, and are receiving questions about the changes, the customer service team can let them know that while they will need to pay a delivery charge in the future, there is also an option where they can pay a slightly higher fee to choose a timed delivery slot (i.e. an option that has more perceived value than standard delivery).

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Ensure consistency across all channels

When communicating a price increase to customers, it’s essential to ensure that no stone goes unturned in terms of the channels that a shopper may find you on. While an announcement email will hit a percentage of your customer base, it’s not going to reach those who haven’t subscribed to receive updates, those who don’t open it, and it certainly won’t make it to shoppers who have browsed your store but haven’t purchased anything with you to date. Ensure that the details of the price increase are visible across all channels – on the homepage of your site (linking to a webpage with the announcement, some FAQs and ways to get in touch with questions), on your social media platforms, in newsletters, on the checkout page, etc.

 

It’s also worth doing an audit of any future marketing or promotional materials to make sure that any pricing that’s mentioned is in line with price increases – the last thing you want to do is to create a storm by advertising incorrect pricing.

 

 

Whether you are no longer offering free delivery for sustainability reasons, or increasing your online prices due to inflation and supply chain issues, being open and transparent with your customers is the most effective way to make the price transition as smooth as possible.

Find out how Scurri helped fashion brand Everything5pounds increase conversions, half their delivery costs, and expand internationally. Download the case study here.

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