Customers don’t like change.
No salesperson will dispute this claim. It comes up nearly every time we talk about raising prices, increasing profit margins, changing crew routes, or even offering different technology.
When these topics surface, inevitably someone says, “We can’t do that. Our customers won’t let us! They don’t like change!”
While this idea tends to creep into nearly every sales meeting, customers’ resistance to change doesn’t mean we shouldn’t make the changes necessary for our business to succeed — even when that means raising prices.
If we operate a business by the principle that customers don’t want change, we set a damaging precedent:
- We can’t tell them that prices have changed, so we can never change our pricing.
- We can’t change the crew.
- We can’t introduce new technology.
That’s not a fun business to be in — and it’s not realistic.
If you’re not raising your rental prices or making other necessary changes, you’re hurting your business.
Why We Resist Change
It’s not reasonable to think you’ll run a successful AV business without changing and adapting. Yet, the myth that customers don’t like (or can’t adapt to) change persists because of stories and fear.
There are always anecdotes that tell us customers don’t like change, such as, “We raised the delivery rate and this customer quit renting from us!” However, most customer objections to change aren’t complex — they’re single-level objections that any good salesperson could overcome.
The fact is, we all expect change. I don’t expect to pay the same for a hamburger that I paid 10 years ago. I expect the price to rise because I know the cost of the ingredients is more. Your customers expect this too. We’re in the technology business — technology gets old, dies, and becomes too expensive to repair.
Customers understand that.
Our fear of customer reaction actually perpetuates their resistance to change. When customers say, “Why does the show cost more this year? That wasn’t in my budget last year,” we have to look at the reason they expected the price to stay the same. Often, they believe this because we told them. We were afraid of doing anything we thought could upset them — including raising prices.
Why Change Is Important for Your Customer and Your Business
While it’s tempting to fall into the trap of avoiding all possible change for the sake of customer satisfaction, you simply can’t afford to. You need to change for the health of your organization, and your customers need to see you adapt.
Stagnation breeds more stagnation.
If you don’t introduce change to your customers, you become stagnant. When they need something different or have a problem, they’ll assume they need another provider. They won’t see any opportunity for you to improve because that’s the expectation you’ve set.
They’ll still resist, but customer push-back isn’t necessarily a bad thing. Customers are supposed to be resistant and question the price. That’s their job as customers! When they question the changes we’ve made, it’s our job to have a good answer.
If you’re priced well below market value for your services, expect your customers to be upset when you start raising prices. The more below market your price is, the more upset your customers will be when it changes.
Right now, their reason for not switching providers is that you’re not going to change. They believe if they object loudly enough, you’ll give in and they won’t have to switch.
But in reality, customers don’t want to switch providers. In fact, they want a reason NOT to switch. They’re not thinking, “I hope the salesperson calls today and completely upsets my life so I can search for a new supplier.”
They have a higher tolerance level than they admit — maybe it’s a 5%, 10%, or even a 20% increase. If you’re a good salesperson, you’ll find out.
How to Raise Your Prices and Not Lose Your Customers
Good news — if you’re stuck in price paralysis, you can get out of it. Here’s how:
1. Understand Why Price Changes Matter
Change is important for your business. As managers, we need to review the effects of pricing and understand how it affects the P&L.
In my years of consulting, I have not talked to an AV business owner who’s making the same amount of money they made 10 years ago. Margins shrink. Our costs go up and we can’t recover all of it.
In today’s market, there are fewer barriers to competition and more products and services available to the customer. We can’t always make the same margin we once earned, but we can still make a profit if we price our products and services wisely.
2. Change Labor Pricing First
Line items like labor pricing and delivery charges are the easiest changes to introduce to your customer. These changes bring single-level objections you can easily combat.
Every single customer you have personally thinks they’re worth more money than they were last year. When you say, “We haven’t given our team a raise in five years. It’s time to up their pay.” They’ll say, “Yeah, that makes sense. I like Bob, he’s a good guy.” People know things cost more, particularly when it involves labor.
3. Prepare Two Reasons For Each Change
Whenever you expect an objection, have at least two reasons to counter it. Your customers will rarely have more than one objection lined up. If you have two responses ready, you’re one objection ahead of them.
If your customer comes up with a second objection, you’ll have a second response on hand. If you can address both objections, chances are you’ll move past the change and maintain the customer relationship. You will have satisfied their need for understanding and logically explained why they need to adapt.
Customers may not like change, but they are willing to change. Don’t fall prey to the myth that raising your prices will destroy your client base. You’re in an industry that relies on innovation. Raising prices is part of the deal.
Make the changes you need to make. Your company and clients will be better for it.