2022 is proving to be the year of price increases. Because of lingering supply chain issues, the growing cost of raw materials, and a new wave of global sanctions, many companies are now finding that their products cost more to produce and ship than before. To stay afloat, they are contemplating hiking their prices.
The consumer price index is up 7.9% compared to a year ago, and the shaving brand Billie, snack brand Smucker, and energy drink brand Monster have all boosted their prices in recent months.
Raising your price is a scary proposition. You never know how many of your customers are price-sensitive shoppers who would abandon your product for a competitor’s if you impose an increase that’s too high.
Fearing this outcome, some brands have opted to reduce the quantity of products they offer in, say, a bag chips, a process called “skimpflation.” Hershey Kisses now come in packages of 10.1oz, rather than the pre-COVID 11oz, for instance. But the downside of this approach is that your most loyal customers might be surprised to discover they don’t get the same bang for their buck.
That’s why communicating these price swings as transparently as possible is essential to making sure your customers stay loyal to your brand. Significantly upping the list price on your Shopify store without warning can make a price jump seem more nefarious than it is.
The primary reason that most brands are raising their prices now is that the raw materials they use in their products cost significantly more than they did prior to the pandemic. If that’s the case for your brand, you shouldn’t hesitate to give a slightly in-the-weeds explanation to your customers about how these downstream supply chain troubles are impacting your business. Because of continued stockouts beginning in early 2020, almost everyone now understands the ramifications of a stressed supply chain, and customers will be more forgiving when you offer an explanation along those lines. Many brands that have recently raised their prices have made Instagram posts explaining exactly how supply chain challenges are impacting their prices. In the fall of 2021, Oxford Pennant, a maker of custom flags and wall art, announced on Instagram that its pennants would go up from $50 to $60, and it was quick to express its frustration with the situation: “Darn it! Almost all of our material suppliers raised their prices this year. Felt, grommets, thread – all of the pieces needed to make an Oxford Pennant.”
The rising cost of shipping is deeply intertwined with the rising cost of products generally. At the start of 2022, for instance, both UPS and FedEx announced 5.9% shipping increases. A good way to convey a price jump to customers is to emphasize that the extra costs will allow you to continue to meet a speedy shipping timeline and get your products to their door as swiftly as possible.
No one wants to feel like a brand is raising prices just because they’re trying to make more money for themselves, and if your price increases are in fact tied to factors beyond your control, you should explain that to customers. This could also be a place to highlight a bit about your brand storywww.chatdesk.com/blog/examples-of-production-delay-apology-templates: maybe you’re a small, family-run business already operating on thin profit margins, and you need to increase prices to ensure you can still do this work that you love. Whatever your brand’s story, you should be sure to refer back to it in your Instagram or TikTok post about these increases.
Most e-commerce companies over the past year have posted news about their price increases on their Instagram, Facebook, and TikTok pages. These social platforms, after all, are where your most loyal customers—the ones who are most likely to notice and care about a price hike—are likely to interact with you. Especially if the new price is a relatively dramatic increase, you want to ensure that as many visitors as possible see your explanation. One way to do this is to pin the post to the top of your social media profile. Instagram, for instance, has a tool called Stories Highlights that places your most important IG stories at the top of your profile. TikTok has a similar feature, called Playlists, while Twitter and Facebook each have a formal “pinned posts” option.
No matter how delicately you explain your price increase, you are almost certain to get some pushback from customers. That’s why it’s essential to have customer support agents on hand who can help address any concerns that pop up, or who can moderate comments on your social media in case they are too negative. Chatdesk Teams offers verified Superfans of your brand who not only know the ins and outs of your products, but who will also explain to your customers why your company’s prices needed to change in the first place. Chatdesk customer support agents can respond to your shoppers wherever they are, including in the DMs or comments of Instagram or TikTok.