Increase Price – Reduce Customer Costs

If you are in a business to business environment one way to successfully implement a price increase is to more than offset your increase with costs you save your customer. Here are a few ideas on how you can implement this strategy to gain value for you and your customer.

Can you re-engineer your product to run more efficiently through the production process of your customer?

Can you recycle your packaging and pay the customer for its recovery? I did this with wooden pallets we used to transport Acrylic sheet and we recovered more than £100,000 per year in pallet costs and also eliminated a major disposal problem for the customer.

Can you ensure JIT (Just in Time) delivery so the customer saves on storage space and only pays for product immediately needed in their production? A simple way to run this is by pallets rotating from supplier to consumer. Once a pallet is empty i.e. the product has been used, it is returned on the next delivery to the supplier who immediately fills it. A pallet already filled is immediately despatched back to the customer. This can be operated at the shop floor level in a very efficient way and is simplicity itself. Your customer is never out of stock and you can reward the shop floor managers at the end of the year for their faultless operation of the pallet replacement system.

Can you use social media communication to explain to the end user why the increase is required? Your customer will then find their market well prepared for their own price increase on the back of yours. Direct contact with end users is an increasingly powerful means of marketing. Encourage feedback so you instantly have a gauge of market reaction. This can be shared with your customers to ensure you are all in step with what the market thinks.

Put the customer and your Production Directors in regular contact so they can share best practice. They will also let off steam by mutually moaning about the problems caused to them by their respective sales and marketing staff. The closer your working cooperation with each customer, the less likely you are to lose them at this critical time.

Top tips: Create a win – win situation for you and your customer. Find ways to save them money and help them implement the price increase with their customers.

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