Honesty and transparency are key to explaining why your prices are increasing.

Read just about any business news journal these days and you’ll see stories about the increasing cost of doing business and concerns about inflation. At some point, raising prices is a matter of staying in business. However, delivering the news of a price increase can be daunting. Check out these three tips to let customers know that your product or service is about to cost more.

Be direct about the price increase

The Harvard Business Review advises against using euphemisms such as “price adjustment,” “price change” and “price update.” Euphemisms can arouse suspicion and make recipients of the message critical of your announcement. By using the term “price increase,” you demonstrate transparency with your customers.

Explain to customers the reason behind the price increase

No one likes to learn that prices are going up, however, understanding the reason behind the price increase can make the news easier to accept. Share data with your customers such as the increased cost of materials, the cost of labor or the expense of complying with new regulations. If it’s been a long time since your last price increase, share that with your customers, too.

With the cost of many other things rising recently, your customers may be more understanding than you think.

Reassure your customers that your commitment to the continued delivery of high-quality products or services.

Notify customers in advance of the price increase

You don’t want to surprise customers with a price increase. HubSpot encourages businesses to notify their customers well in advance of the increase. Depending on your business cycle, advance notice could be a few weeks or even months before the price increase goes into effect. Give your customers time to process how the increase will affect their budget and consider other potential alternatives.

In addition, HubSpot also offers the suggestion to encourage customers to purchase one or more orders before prices increase, which can be a great opportunity to build customer loyalty.

Consider these tips the next time your business is faced with raising prices. Your customers will appreciate straight talk, understanding the reason for the increase and receiving advance notice.

Do you have business banking questions? Contact our knowledgeable commercial loan officers online or call 800-991-2221. We’re also available to help in person at your local office.

Federally insured by NCUA