A manufacturer, an insurer and an operator are in a boat
When Price Increases Challenge Customer Culture
This boat is that of the price increases at the beginning of the year.
When I spoke to each of them last week, they expressed their dismay: what impact could a decision to raise prices have on the company’s customer culture? An excellent question which, incidentally, shows the level of maturity of my interlocutors on the subject.
The question they ask is an important one: it’s not just the impact of price increases on customer satisfaction. It’s the coherence perceived by the teams between management’s discourse on customer satisfaction objectives and the decision to raise prices. This will be identified as detrimental to customer satisfaction. In other words, by taking the decision to raise our prices, we contradict our “Satisfaction” strategic objectives. Consequently, our employees will interpret it as an action against customers… We are indeed facing a real customer culture challenge.
Two Key Reactions to Consider
Turning a Price Increase into an Internal Learning Opportunity
Isn’t the moment of a price increase an opportunity to educate internally?
If we know how to use satisfaction survey data, it should be possible to show teams the impact of a price increase on customer dissatisfaction. How strong is the impact? On which targets? Which variables contribute most to dissatisfaction? Is a price increase one of them?
A little statistical detour through a “satisfaction model” would be a good way of explaining to teams how customer satisfaction is built up. There is no doubt that price is perhaps not what creates the most dissatisfaction and attrition.
This kind of education, explaining what satisfies customers and what doesn’t, is what customer culture is all about! It’s about showing teams that, in managing the company, we take into account the impact of our decisions on customer satisfaction. And that if the company has to increase its rates, it does so with full knowledge of the facts. Additionally, it measures the impact on customers.
Using Difficult Decisions to Strengthen Customer Commitment
Isn’t this painful decision to raise rates also an opportunity to reinforce internal convictions about the quest for customer satisfaction?
Teams won’t feel they’ve been given a contradictory injunction if, at the same time, they’re asked to continue satisfying customers, provided :
- they are aware of the real impact of price increases on customer satisfaction
- they are able to understand and accept it
If they’re convinced that the price increase is a necessity for the company, and that the battle for satisfaction continues in other ways. They shouldn’t have to worry about the company’s fierce determination to keep its customers satisfied and loyal.
The True Test of a Strong Customer Culture
We could even go further: if a price increase alone is an indication to employees that the company’s customer strategy has changed, then the customer culture is fragile, or even lacking. Such doubts do not arise in a company with a strong customer culture.
On the other hand, you can take advantage of this price revaluation to get your teams on board in the quest for even greater customer satisfaction. Encourage everyone to look for ways to compensate for dissatisfaction. This limits the potentially destructive effect of revised prices. Do this by nurturing services, improving customer relations in person, on the phone, or by e-mail, and boosting the customer orientation of your teams! In other words, focus on what really drives customer satisfaction.
I hope you’ll bear this in mind the day you decide to raise your prices. The quest for customer satisfaction is often not the preserve of calm and serene moments… Customer culture is built especially in the most impetuous moments.