How to Communicate Price Increases
This guest blog post is by Dr. Michael Tatonetti and was originally featured on the blog for Pricing for Associations.
One question that I'm frequently asked is “How do we raise the price of our virtual event when we did a free event or a very low cost event last year?”
I'm here to tell you that it is possible, and that this really comes down to communication. I'm going to share with you three key things that you need to include when communicating a price change, especially within the context of raising the price of a virtual event when you did one for free or low cost in the past year.
- The first thing that you need to communicate with your audience is that you provided the event for low cost or for free last year, out of urgency that your members had the right training in the midst of a global pandemic. What this does is it allows for you to clarify that it's not something that you would do every day or would normally do, but rather it's something that was for a special time and purpose, and not the norm. It also allows for you to infuse compassion awareness and empathy into the decisions that you've made over the past year, while signaling that it's time to move in a different direction.
- The second thing that I would recommend communicating is the financial sustainability of the organization. And I would make this argument in light of your members being the hero. I would share something along the lines of: “Because our members have supported us so strongly over the years, we were able to do something radical or drastic during a pandemic. And now, As we begin to see the silver lining in our world, we are ready to begin moving back to proper financial sustainability for our organization, so that our nonprofit can continue to thrive and fulfill our mission for many more years to come.” What this does is it reminds the members that while you are a non profit, you still need profit in order to do the work that you do and you can't give everything away for free. It also triggers in their mind that they play a crucial role within your organization, and helps them to feel good about what you were able to do this past year but also that they can continue to contribute in a way that allows your organization to not bleed its profits.
- The third thing that I would recommend communicating for this price increase would be the value. I think that one easy thing that most organizations can say is we learned so much from putting on an event last year. And we have grown and we can't wait to make the experience even better for 2021. What I mean by this is many organizations were not fully confident or competent in how to pull off a virtual event. So we were flying by the seat of our pants and pulled off what we could in the best way that we could. By signaling that you're raising the price, you're also attaching it to the value and saying “Hey, we know that we got this 70 or 80% right, but we're really working to make this 100% right this year, so that it's a quality training experience for all of our attendees. And because of that, we need to ensure that the price matches the value, just like it would for any other products in our catalog.”
By following these three tips, you should be able to communicate a price increase correctly, so that your members and attendees have understanding and buy in to paying a more realistic rate for a virtual event. If you aren't sure what price you should set for your virtual event moving forward, we're here to help. Feel free to reach out to us at www.pricingforassociations.com for a strategy session to discuss your pricing needs.
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