Price Increase TMI?!
I consistently see a problem with oversharing when it comes to price increases, pricing policies, and pricing in general. When companies make a price change, they feel it necessary to share, share, and overshare information about price changes to their customers. This (over) communication is based in a well-intentioned desire to be a good partner to the customer and to be seen as being transparent and fair. We confuse transparency with good service and opacity with duplicity, but these aren’t the same things.
Here’s the deal: all that communication and transparency is increasing your customers’ price sensitivity. Communicate only what you must, and no more. Communicate pricing changes as little as necessary and as low-intrusive a format as possible. Here are few things to consider:
- No Announcement: Do unnoticeable price changes need to be communicated at all? Your cell phone carrier doesn’t let you know that the line charge increased from $0.13 to $0.19 via a price increase announcement process. What changes are beneath customer notice that you are asking them to notice by calling attention to it?
- Less In-Your-Face Methods: Once you have determined that announcement is necessary, what is the right way to communicate a price increase? Sit down? Letter? Phone call? Answer: the least of these which gets the job done. Given a format to complain about pricing, customers often will, even when they don’t care that much. Robbed of an easy mechanism to do so, many will accept a price increase without much pushback.
Imagine you receive notification by mail that your high speed internet bill will increase by $2 per month. No one would be thrilled, but few will pick up a phone to complain. The price increase will pass into history quickly with almost no customer reaction. If the company calls each customer individually out of a misplaced desire for good customer service and transparency to let everyone know personally, customers will vent frustration and anger by phone, just because they were given an unnecessary forum to do so.
A tailored communication plan is ideal for many B2B companies. A manufacturer I know provided no notification for online list pricing and tiny customers buying very little, a price increase letter for medium-sized customers, and a meeting (in person or by phone) in addition to written notification for their largest, most price sensitive customers.
Of course, you must provide appropriate and responsible notification to customers. I am not recommending duplicity or trying to slide anything past your customers. But I see over and over that companies are shoving pricing in the faces of their customers (sometimes repeatedly) in the name of service and transparency, resulting in unnecessary price sensitivity.
Don’t overcommunicate! Communicate only when and where necessary. Over-sharing creates price sensitivity where none would have otherwise existed.