Price changes are a reality for all businesses.

Most of the time, those price changes are increases driven by factors unique to the business or market conditions that cannot be easily controlled. Selling a price change to customers is necessary and requires a high level of communication and a customer-centric value narrative — why it is good for your customers.

Why Prices Change

Pricing in the printing industry is most often influenced by supply and demand, production costs, economic/market conditions, and competition. Businesses are facing economic conditions not experienced for decades. The past couple of years are a great example of how a supply and demand imbalance can influence pricing. Sourcing paper, ink, and other vital consumables was difficult, if not impossible. Disruptions in the global supply chain, caused early on by pandemic lockdowns and later by distribution challenges and labor shortages, meant fewer key production inputs were available to purchase. Less supply with the same market demand means prices tend to increase.

Inflation is also at historic highs. Inflation is in decline in purchasing power over time as prices increase. Last June, inflation in the US reached a 41-year high of 9.1% compared to 2.3% in 2019. As general costs of living increase, employees demand higher wages which creates another cost increase for businesses.

The Value From the Price

Famous investor Warren Buffet once said, “Price is what you pay. Value is what you get.” When passing on price increases to customers, it is essential to frame the increase in a way that illustrates the value received. Let’s say that prices need to rise because the business needs to upgrade its equipment and technology. A customer-centric value approach would be, “To provide you with the best innovative print products and online ordering experience, we are investing more than $X over the next three years. We know you expect the best, and with the following price increase, we can continue to deliver just that.” 

What if the price increase is simply related to higher input and production costs? One way to approach this situation is to state the significance of the increases, how the business has tried to offset them, and the best path forward for the business is to raise prices so that the services or products delivered do not degrade. For example, “You expect great looking print delivered when you need it at a fair price without exception. We want to continue meeting your expectations without compromising on quality or service, which requires a cost increase of $X due to the unprecedented increase in our supply costs over the past year.” Remember to keep the message succinct with empathy for the customer’s situation but focused on the ultimate benefit they will receive from the price increase. 

Delivering the Message

Delivering price changes to your customers depends on many factors, including the type of customer relationship, company culture, and in some cases, based contractual obligations. Regardless, consider how you would like to receive the notification if you were in your customer’s position. Business-to-business sales tend to have longer established relationships where a personal phone call is the best approach. Approach the conversation with the same level of sincerity, customer focus, and attention to detail as you would bring to other business-enhancing projects like introducing new products, adding new equipment, or onboarding new employees. With the right customer-centric approach, the price increase will sell itself.

Price Change Conversations Should Be Customer-Centric

While you will likely want to avoid exposing every detail of your cost structure, profit margins, and business strategy, do let customers know that your print industry suppliers are also raising prices. Remember, too, that timing is important.

Many businesses set their printing budgets on a yearly basis. They may make mid-year or quarterly adjustments, but they plan based on their forecasts. Price changes for printed products, large or small, mean they need to re-assess their budgets. Begin by understanding your costs as a print reseller and what you need to communicate to customers. Then develop a program so that everyone on your team is communicating the same message.  

Your communication program should include five elements:

1. Internal agreement on increases and how they will be communicated.

   Before you begin talking to your printing customers, everyone should be on the same page within your organization. Customers worry when they hear mismatched messages, so work with team members to keep the messaging on point and consistent.
   
   

2. Direct communication with customers when circumstances permit.

   A visit to the customer is best, but if that isn’t possible in the current environment, try to share your message in a video or phone call. If the amount of customers your printing business has makes this impossible, be sure to craft an email that is personal, and suggest ways you can help them stay within their budgets to get the most value.

3. Advanced warning with defined timeframes for price changes.

   Customers need time to review their current buying plan. While internal pricing may be changing more rapidly, try to give customers as much warning as possible. Can you give them three months? Or only one month? Whatever timeframe you use, be prepared to explain it to your customers. If you can offer deals in advance of the price increase, customers appreciate the consideration.
   
   

4. Reasons for the price increase at an appropriate degree of granularity.

   In most cases, there will not be a reason to expose every element of every price change to your printing customers. Instead, look for strong, high-level reasons that will make sense to customers and accurately reflect why you are changing your price structure.
   
   

5. A plan to follow up as price increases approach.

   Announcing a price increase shouldn’t be the last conversation you have with your customers. It should be part of ongoing contact. Create a plan that ensures the sales team will continue to stay in touch with customers. Create special bundles and deals that you can offer on a regular cadence to deliver alternative value to customers.

Price changes will happen. Keep your customers in the loop by keeping your relationship as close as possible. The 4over team can work with you to create new offerings and build bundles to help reinforce value, so contact us for help!