now if there is anything worse than
telling a client about a price increase
i just don't know what it is if you're a
key account manager then you know
it is not as simple as just saying you
know hey guess what our prices are going
up okay
if only was that easy no what lies ahead
is just a bunch of long drawn-out
conversations delicate negotiations
internal battles
and tight deadlines to get it across the
line so sit tight i'm going to hold your
hand the whole way through i'm going to
share with you exactly what you need to
do
to make the process of communicating a
price rise as smooth as possible so sit
tight i'll be right back
[Music]
hello and welcome back heroes it's
warrick here from account manager tips
and it is my mission to help busy gear
account managers get
results so look let's talk about how to
get that price to increase across the
line okay you know we're in this
together you know you're me
now first things first uh conversation
first and correspondence second there's
nothing worse than an impersonal email
arriving in your inbox to notify you of
a price hike
now for a big price rise you really must
talk to your customers first i mean
they're just going to pick up the phone
and you know ask you what the hell it's
all about anyway
so you might as well make the first move
now but i briefly share the details and
let them know that a formal
communication will follow
and then they can reach out afterwards
if they have any questions this is
you know it's going to put pressure on
your client's costs it's going to create
extra work for your key contact to
implement and manage the change
so please be sensitive and sympathetic
now give as much notice as you can um
you know the increase the greater the
notice required why
well there's going to be things that
your client may want to consider in
response to the price increase you know
they may need to let internal
stakeholders know they may need to
update their procedures or their back
office systems and they may even need to
explore alternative
suppliers so be prepared for that
next up let your clients know what's
changed raising prices is often linked
to additional or improved services
and as a business you constantly invest
in your products your solutions and your
people
you know that don't come cheap a price
increase is perfectly justified and the
best way to communicate it is by sharing
with your clients the drivers that have
led up to the rise
and how they've benefited and how they
will continue to benefit
and while you're at it let them know you
know your vision for the future and that
there is a lot more to come
now don't apologize you can be
sympathetic you can be sensitive to the
impact of the price increase but you
have nothing
to apologize for operating a business
costs
money not to mention the market forces
over which you have no control
deliver the message of a price rise to
your client with confidence believe that
you have a great solution with
every penny and then some if you're
apologetic you're going to send the
wrong message that even you don't
believe in the price rise
and you will end up in a long drawn-out
conversation about why
i know a word of warning don't over
explain
your client does not need to know how
the sausage gets made
the detail of the inputs that lead to
the output should be confidential
you know just give them the briefest
explanation you can get away with about
what has led to the price
rise too much information and you may
confuse your client
or you may invite conversations that are
quite frankly none of your clients
business
or distract you from you know your
objective which was to communicate the
price rise in the first place
keep it simple if your price rise also
includes a change in the pricing
structure
make sure it's simple i've had these
menu-based pricing that you know
you need a mathematics degree to put
together or bundled pricing with
optional extras that make
absolutely no sense i had situations
where a client could buy a bronze
package
with a couple of add-ons and then end up
with a platinum package at half the
price
so put pricing through its paces and
look for loopholes your clients
sure will and if you can't explain it
easily well how do you expect your
client to understand huh
consider alternatives now if you've got
clients that you know will be enraged by
a price increase you know what happens
evaluate alternatives that may yield a
similar result to the bottom line so for
example you might move them to or from
fixed fees you might give longer
contract periods or link it to volume or
a change in configuration
i had some clients that were on ancient
contracts and they had a dedicated
account manager that was paying
two and a half thousand a year for and
the going rate was like 10 grand so i
had to say
you know either you keep the account
manager you have and you start to pay
more
or you move to like an inbound telephone
based solution you can pay less
some love their account manager and you
know paid the 10 grand while others
chose to reduce the level of account
management
so they can continue to pay less
will you negotiate when you tell your
client about the price increase
you are initiating a power play will
they accept will you negotiate or will
you back down
if your client challenges you and you
immediately revoke the increase
and bring you know wanna like pretend we
never had the conversation
you gotta forever be a doormat before
you present that price increase know
what you will concede and have your
walkway position in mind
always ensure that any concessions you
make are an exchange not a gift your
client should always offer something in
return
in exactly what to say the magic words
for influence and impact
phil m jones suggests a simple question
if i can
will you for example if i can keep the
price the same
will you sign a three-year contract i
love that structure
now remember loyalty does not equal
discounts if your price increase
coincides with the renewal
be prepared for a conversation about
discounts can you imagine your client
saying something like
um oh so you know i've been with you
five years and that's how you repay me
with a price increase
it happens and it's completely
irrational the cost of your business
operations has nothing to do with how
long your clients are stuck around
you know but we're so used to frequent
flyer schemes and customer loyalty cards
you know people think it works in
business as well so know what you'll say
if and when your client challenges you
about price increases
and say they are expecting a discount
implement annual price reviews you know
if you find yourself constantly going
back to the table
year after year negotiating price
increases then set expectations by
establishing
how and when you review commercial terms
within the contract for example include
conditions that raise prices every year
in line with inflation you know calendar
year though not contract year
or provisions that formally return you
to the negotiating table
every year for a pricing review through
enhanced terms and conditions you can
automate some of these price increases
and certainly make initiating pricing
conversations much easier
now be ready when they say let me speak
to your manager so you've done
everything you know how to get your
client to accept this price increase and
they are still
pushing back what is the escalation path
for a formal complaint or dispute about
the price increase
who do they contact and how uh is so
much better to know in advance than to
scramble around for somebody you know
when it all hits the fan
on a related note if you've got a client
you know is not going to take this price
increase lying down and you're concerned
about your ability to leave the
conversation
let your manager know they can help
coach you they can rehearse the
conversation with you
or they can even join you when you
deliver their message make sure everyone
is on the same page when it comes to
whether or not you are prepared to let a
client go or to back
down there is nothing worse than when
you as an account manager dig your heels
in
and then your manager override you just
because they couldn't deal with the
confrontation and yeah
it happens
now please deliver a consistent message
you know you want to just make sure that
your entire organization is aware of the
price increase
why it's happening when it's happening
and what the approved message is
there are so many contact points
customer service delivery back office
etc and your communication strategy
could become undermined
if your team's unaware of upcoming
changes know what to say when asked
questions
or who to direct calls to that want more
information
and last but certainly not least manage
your feelings i want you to know that it
is
okay to be anxious overwhelmed or even
scared of a conversation with your
client about a price increase
it's completely normal to feel like you
might be opening you know pandora's box
so acknowledge your feelings and talk
about them with someone you trust
preparation and working through the
previous steps will definitely help you
do
but also know that as a key account
manager you are the messenger
and there will be times you know you
must support a position by your employer
that you might not be you know on board
with
share your constructive feedback and
move on holding a grudge will only make
delivering the message so much more
difficult and may also impact how people
perceive you in the organization
especially leaders
don't kill your career over a
disagreement on how when or if your
company should raise its prices
all right let's recap real quick
conversation first correspondence
second give your clients as much notice
as you can let clients know what's
changed and frame the price increase
around value
don't apologize don't over explain keep
it simple consider alternatives
know whether or not you were prepared to
negotiate and by how much
remember loyalty doesn't equal discounts
and be prepared for that conversation
implement annual price reviews if you
can define escalation paths deliver a
consistent message
and manage your feelings follow these
tips and i'm absolutely confident it's
going to be a lot easier next time you
need to communicate a price increase to
your clients
now if you're a member of the camp club
check out the replay and show notes from
the cam project the one about increasing
your prices
where we dig into this topic a lot
deeper and look if you're not a member
of the cam club or what are you waiting
for
the cam club is a private learning
community helping busy account managers
get results
inside you'll find tutorials guides
templates training and
of course a connected community of
account managers or there to help you
succeed
find out more at them club.com all right
so anything i missed what works for you
when it comes to breaking the news to
your clients about a price hike
i'd love to hear from you you know so
please comment below and don't forget to
like subscribe
share and follow the hashtag aimtips for
more videos and of course if you want to
stay in touch
you can find me at warwick a brown on
the social media platform of your choice
so until next time heroes bye for now
you