Announcing price increases to clients — especially to loyal customers — is challenging for many luxury real estate professionals or the salesforce in general. After all, a price increase announcement isn’t exactly good news. But because of a combination of many factors, like the higher cost of production or negative economic growth, many businesses are compelled to raise prices.
The way you communicate to your clients plays a big role in whether they will take the change negatively or with understanding. With proper strategies in place, you can still strengthen customer loyalty and maintain sales growth despite price increases.
So how do you do this right? In this blog, you’ll learn about the best practices when making price hike announcements, how to start the conversation with your customers, what drives price increases in the real estate industry, and more.
The rule of thumb in announcing a price increase: always tell clients in advance. Notify them about any price increase at least one month before. Remember that investing in luxury properties, residential real estate, and commercial real estate is a major undertaking that requires adequate financing and preparation. Buyers may need to re-adjust their budget and change some aspects of their plans. Give them plenty of time to adjust.
With that in mind, start your conversation with your clients using these handy tips:
On topics as important as a price increase, direct communication is a must. The quickest way to stir complaints or customer outrage is blindsiding. If the company wants to raise prices, go through your list of clients and let them know in person, by phone, or by sending them an email with a price increase letter. A price increase letter is ideal if you are dealing with a big group of customers. Generally, the email should include the reason behind the price increase (more on this later) and when the new price will be implemented. Address the price increase letter to each client and make the process personalized as much as possible. Being authentic adds more value to the message rather than a generic, corporate email.
Price hikes are not an uncommon phenomenon. Price increases happen not only in the luxury real estate industry (both in commercial and residential real estate) but also in all businesses in the market. Before you break the news to customers, you must understand the reason behind the new pricing.
Transparency is among the major things that keep customers coming back and makes them happy. Being transparent makes your announcement less corporate and more trustworthy, which makes it easier for your clients to be on board. Research shows that the perceived reasonability of a price increase influences how consumers react.
Give specific and justifiable reasons—make it clear that the company is just responding to market changes and is not simply chasing undue sales. Some of the common reasons for the price increase are scarcity of raw materials, changes in the company’s operations and labor cost, declining economy, inflation, and others.
NOTE: Make sure to include which luxury properties are affected by the price increase as well. Brittany Corporation offers thematic residential real estate luxury properties in the Philippines—Crosswinds, Portofino Alabang, and Brittany Sta. Rosa. Here’s a quick rundown of the exclusive enclaves:
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At the end of the day, consumers will always prioritize the value they will get in their real estate transactions. How will the price increase benefit them? Would the change affect the quality of the luxury homes offered? Justify them paying higher prices for the product and service by not compromising quality. Focus your client’s attention to upgraded features or at least assure them that the company will maintain the superior product quality it consistently provides. Remind them of the market value, prestige, and the best customer support that comes with their purchase.
For instance, when affluent buyers purchase luxury homes from Brittany Corporation, they are not simply scoring houses. They are adding an increasingly valuable asset to their real estate investment portfolio at reasonable interest rates and flexible mortgages. Brittany Corporation offers the most beautiful luxury homes in master planned communities and strategic locations, making them appreciate in value over time. Not only that, clients do not have to worry about the technical aspects of buying luxury properties. Brittany’s reliable corporate sales team—the Brittany Salesforce—guides buyers on their sales inquiries and in every stage of the process.
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An effective price increase announcement reaches both sides of a company—the vendor and the consumer. All stakeholders of a company should know about any price increase on their products and services, so they have a consistent voice on the update. Charging outdated prices to consumers paints a negative brand image that can affect how your customers receive the price increase.
Ensure that everyone understands the details of the situation, including the price difference, the cause of the rise, and other pertinent information. To be on track with the latest happenings concerning the Brittany Salesforce, make it a habit to check the Brittany Corporation’s Seller’s Portal.
Reassure your clients that the company is open to answering further clarifications and concerns as well. Increase consumer trust and confidence in your offerings by showing that you have nothing to hide. This also ensures that clients understand every detail they need to know about the price increase. More money will be spent on acquiring new clients than on retaining existing ones. Give customers the impression that the organization will always value their requirements.
The sales price increase is an unavoidable part of any business. The changing economy and the sometimes unpredictable market conditions will likely change a product’s value and price over time. And not adapting to these environments in the name of lower prices can equate to losses, or worse, the closure of a business.
Whichever strategy you choose to relay price changes to your audience, remember that the goal of informing them is not forcing them to accept such changes. Instead, you are doing your core purpose as a luxury real estate sales professional—helping buyers make an informed purchase decision in the process of finding their dream home.
