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Communicating Price Adjustments
The PRICE-RADAR identifies opportunities in your parts pricing - realizing these potentials means adjusting prices. Learn how to successfully communicate these adjustments to your customers.
The PRICE-RADAR provides market insight and reveals price increase opportunities for your spare parts. There are price increase and market share opportunities for 95.9% of all spare parts. Realizing these opportunities means adjusting, i.e. increasing or decreasing prices. Price adjustments are an opportunity to intensify customer communication.
Find out how you can successfully communicate these adjustments to your customers here.
The communication of a price reduction greatly enhances the company's reputation by creating the perception that it is a fair partner that offers customers an opportunity to reduce costs. If the PRICE-RADAR has identified price optimization potential, sales and market share increases can be the result. As a result, communicating price adjustments that reflect the market requires careful planning.
When communicating price increases, we distinguish between 3 cases:
1. Individual communication after customer request
If you do not have an online shop, your customers will request spare parts prices from you and subsequently receive an offer or confirmation of their order, which will include the updated prices. In this case, the communication of adjusted prices consists of just the written offer.
2. Price adjustments in an online store
Most companies have ceased to maintain price lists. In other words, the prices of individual parts change without notice and on an irregular basis - the best example being online stores. If you have an online store, price lists are obsolete - customers are used to prices that change on a daily basis.
As with other online retailers, web stores for spare parts are just as reactive to price adjustments: Prices are constantly updated because customers compare prices from other online stores with the prices of your spare parts store. So you can and should adjust your prices to remain competitive - without significant communication or commentary. Online stores are therefore by far the easiest way to communicate market-oriented prices for spare parts.
3. Adjusting price lists for wholesale customers
When purchasing spare parts in bulk, wholesale customers usually request a price list and compare it with the prices from the previous year or their previous purchase. Also, frequently purchased parts that are subject to high wear and tear and and are in need of frequent replacing, often reveal price increases more distinctly - everywhere you can compare prices at shorter intervals. If you have moved from a pricing strategy with standardized markups to market-based parts pricing, your markups will not increase by the same percentage for each spare part. If the market analysis identifies price increase opportunities, you can raise the price for each spare part individually to the respective market level. The percentages of price increases can vary for each spare part.
Informing customers about the price adjustment by e-mail is therefore recommended in this case. However, it is important to structure this communication correctly.
INTRODUCTION- HIGHLIGHTING THE QUALITY OF SPARE PARTS
We recommend that you do not immediately begin the communication with the price increase. Instead, focus on the quality of your spare parts and mention that it will continue to be maintained at the highest level. Emphasizing the business relationship is another way to start the email: by focusing on the relationship with the customer and the standing of your company, you can position yourself as a reliable business partner whose product has always been worth its price.
SPECIFY THE ACTUAL ADJUSTMENT
After the affirmative introduction, you can move on to announcing the actual price adjustment.: With this, it is important to mention the exact prices. If you mix the communication of price increases with that of price reductions and other general adjustments and updates, a price increase can be depicted and perceived in a more favorable light by the customer. It's best to group several updates and adjustments together so that your customer doesn't have to deal with multiple adjustments and the associated rework in their systems.
REASONS FOR THE ADJUSTMENT
In the next section of your mail, state the reasons for the price adjustment. If the customer can truly understand the price reduction or increase, they will be more accepting.
HIGHLIGHT BENEFITS OR IMPROVEMENTS
In the last paragraph, it is worth mentioning other positives relating to the price adjustment, for instance, outlining the customer benefits.
OFFER PRICE GUARANTEE
Every customer wants to purchase parts at a fair price. Fair prices are prices that are in line with the market and reflect market developments. You can use this argument to justify your price adjustments, both upwards and downwards - but it is only valid if your prices can withstand comparison in the market. Offering your customers a warranty for these prices is a crucial demonstration of trust and underlines the customer's appreciation, as well as the company's reputation.
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