How to Inform Customers about Price Changes Without Impacting Customer Experience

Jul 24


Reliable Communication

Reliable Communication

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You might be holding back from a much-needed price increase because you’re afraid to make your customers angry. Yes, it’s true that no one wants to suddenly have to pay more, but inflation is a very real thing and it is possible to increase your pricing in a way that your customer base will understand.


There are a number of methods that you can employ to help ease the customer into price differences,How to Inform Customers about Price Changes Without Impacting Customer Experience Articles making sure that there is little to no drop off or damage to your brand’s image.

Here’s how to inform customers about price changes without affecting their experience with your brand.

Why you shouldn’t be afraid to change prices

When you study a comparison of price increases against consumer happiness, you’ll start to notice a trend that should come as no shock: the more your price increases, the greater impact there is on customer happiness.

Price Intelligently was quick to point out the main lesson that we should all take away from this is not that price increases are inherently bad, but that incremental raises, which are carefully planned and communicated to an audience, have a lower risk of upsetting loyal customers.

Companies that start out at an extremely low price (or freemium model) are often forced by circumstances to make a sudden, large jump. When dealing with consumer perception it’s important to remember that all price increases will inevitably be compared to the former price. If there’s a huge gap between the old and new prices without a considered reason, then consumers will feel cheated, even if the new prices keep to market norms.

This can potentially be solved by a principle known as anchoring.

Anchoring is often seen at work when you’re looking at pricing pages that showcase several options. The highest option would be considered the “anchor” and serves to make the others seem more reasonable.

When applied to price increases, the anchor is the past price. When you’re starting at a low price, it limits your ability to raise it—even if you are still charging far less than your competitors.

Price Intelligently explains this concept by saying, “If you anchor people at a low price and raise it dramatically, then no one will see it as getting new value. They’ll see it as gouging.” Price gouging is something that will severely tarnish your brand. You’ll want to avoid even the perception of it.

When accused of price gouging, you run the risk of not only seeing a significant drop off with potential customer, you also risk losing the customers you originally won with lower pricing.

Catching up with higher-priced competitors is very possible, however, you may need to do so over time.

This specific challenge pops up a lot for companies that utilize a “freemium model,” wherein users expect to pay nothing, and then suddenly you start to charge them. Even when that sudden charge is a nominal amount, like say 99 cents, you’ve still triggered a severe psychological hurdle that is difficult to overcome.

Netflix is a perfect example of how to institute a price change with little to no issues. One of the single largest streaming services on the planet, Netflix made headlines after announcing a big price increase for their plans and experts predicted a sharp drop in subscribers as a result of this move.

However, despite that revelation, their stock was soaring when the dust settled. Netflix’s stock rose by 6% following the company’s announcement that it would be implementing price changes immediately for any new customers and spacing the increase out over three months for existing subscribers.

This is not the first time that this has happened. In fact, it is a fairly consistent occurrence whenever Netflix raises its prices.

Their most recent change occurred in October 2017, which saw Netflix’s stock rise 3% on the same day and did not result in a loss of subscribers. In fact, Netflix said that its subscriber pool had actually grown by 10.7% year over year despite increases. It currently has a whopping 58 million subscribers in the U.S. alone and 78 million internationally.

Be Transparent About the Change

If there’s one thing modern customers appreciate, it is transparency. It is one of the major things that they want to see in the companies that they do business with.

As such, if you are going to be increasing prices you must be prepared to open up to the public about it and explain the “whens and the whys.” The single worst action your company could take would be to launch an increase without a word and let it come as a surprise when your customers take a look at their credit card bills.

When addressing such a situation, make sure that you remember to show empathy to the customer and their situation.

If it makes sense, you can also share the many steps that your company has taken over the years to keep pricing down. Showing them the various ways that you’ve already cut your costs will help them understand that this increase is the only way to maintain the quality and service that they have come to expect.

Finally, communicate the change before it happens – one of the best ways to show transparency regarding a price increase is to send out an email. One mass email is usually enough to make your case and inform the customers. Your brand will come out looking better for it in the end.

Remind Them What They’re Paying For (And Why it’s Worth It)

There’s one tried and true sales tactic that you should always remember to fall back on: Proving Value.

You need to have a provable reason to assure your customers that the price increase will be reflected in the value of your product. When new prices are announced, focus on reinforcing your key values. You have to remind customers why they have chosen to do business with you. That will make it easier for them to swallow the new pricing.

When you’re making the price increase announcement, it’s a good idea to subtly remind your audience that paying just a small amount of additional money for a service that they have expressed love for is not a big deal.

This will ring true if you are also adding more value to the product that complements the increase. There is no customer in the world that wants to pay more money for an inferior product. That is why you have to provide them with an incentive through value.

There is a logic that stands behind all price increases. This simple truth can be communicated effectively to customers. Increasing the price of a good or service allows you to offer it at a price that is still a better value than that of your competitors. Thanks to the price increase at hand, you will be able to continue offering this service in a way that is sustainable for the future.

Sustainability is the key component of a price increase. Small increases can be used to adjust to changing conditions. That, in turn, fosters increased innovation. By increasing your prices slowly, you’re protecting against future trouble and the embarrassment of having to bail yourself out with massive price increases.

A business that focuses on sustainability and fostering a positive reputation for seeking out sustainability is something that anyone can understand. Proving value and not getting greedy will earn you some serious points with your audience when it is time to announce.

Offer a Variety of Price Points

If you’re selling a product or service for a set amount, with additional costs attached to add-ons such as updates and support, it might make sense to offer three versions of the same solution at different price points.

While it might seem like you will only have customers who take the lowest possible price, this will even itself out. This is simply because when you offer fewer add-ons on a cheaper plan, you will save on resources being used on those customers.

You will also have some customers who will want the higher-priced service. One thing to remember: you should always be testing all of the changes that you are making. No one will buy the cheapest option in some markets. In others, however, you will have a harder time selling the highest priced option.

There is a quick and cost-effective test that you can institute. Start by creating two different options for your product or service. The first one would be your current offer. For the second, try to add something on top of the original offer that increases value while increasing the price. Even try to double it, if you can.

Once the offer is on the table, start to watch your stats and observe customer behavior. Figure out how many customers are choosing the more expensive option. For every person that does, you’ve just doubled your profits!

Reward Loyal Buyers and Offer Bundled Discounts

By turning to research and real-world experience you can confirm one simple fact; customers want to feel as though they are appreciated by the companies that they do business with.

You can prove to your customers that you value their business, which in turn will soften the blow of a price increase. This can be achieved by informing them that you are rewarding their past commitment by temporarily delaying the price increase that your other customers have to face. Give them a decent period of time such as six months or a year at the old price point to really drive this point home. When the discount window expires, you will be able to raise the price and your loyal customers will have had ample time to mentally adjusted to the change.

Getting repeat buyers requires a completely different mindset. You’ll need to use these discounts to encourage brand loyalty instead of enticing new people to try your products for the first time. This kind of discount is usually implemented through some kind of loyalty program for current customers.

According to research from Colloquy, 55% of people who enroll in loyalty programs do so to receive discounts on their purchases.

Another popular tactic that you could use would be to offer discounts that will cancel out the price increase.

When you raise your prices, some of your very price-conscious customers may fall off. The best way to make sure that you keep a portion of them is to raise your prices but offer occasional discounts and deals that bring your price back down to their original level.

While some of the more frugal members of your audience will use these discounts, many of your less frugal customers won’t even bother. That means that you will still be able to reap the rewards of people who are paying full price while continuing to keep your more bargain-oriented shoppers happy.

Beardbrand, for example, a company that creates beard care products, offers a number of discounted bundles. They are made up of different varieties of the same product type but the products are cheaper when you buy them all together. Customers can try out some different varieties of the same products to find out which one they like the best, or they could change up the scents that they use daily.

So, why should you bundle your products? There are a few reasons.

1. Bundling Increases the Number of Items That You Will Sell – You’re selling several items within one order, which means that each sale equates to more items being sold. That means you’re getting more revenue per order plus lower costs per order. Businesses seeking to increase the number of items that they are selling, or their overall revenue regardless of the margins will find the bundled sale to be a good option.

2. You Can Sell Some of the Popular and Less Popular Products Together – Bundles give you the ability to sell less popular products alongside some of your stronger selling products. That means you can leverage the popularity of some of your best-selling items by convincing customers to buy it along with other items on a discount.

3. Customers Get to Try Your Other Products – If some of your other products are of equal or superior quality to some of your most popular ones, you can encourage customers to try them by bundling them. It’s important to track and measure the sales of some of these less popular varieties to see if they’ll increase after the discount is concluded.


Let’s face it, no one likes a price increase. It’s a tumultuous time that, if handled poorly, could pit business against customer and do irreparable damage to the brand. However, by utilizing the above steps, you not only show your customers why a price increase is needed but you show them respect in the process and let them know that they matter.

By being transparent, hyping up value, offering a variety of price points, and instituting loyalty programs and bundled services you could make it through your price increase more profitable than ever.