Let’s get straight to the point.
When our clients want to talk about price changes, the elephants in the room are:
- The choice of forced date change or on-renewal change
- Customers leaving the plan
- Lead time to send communications
- Costs for sending emails and letters
Based on those criteria, each practice we look after has a different approach.
Working out how often to increase prices, whether to change on renewal, on a fixed date or the best way to communicate their changes can become a challenge.
This often creates a lot of deliberation and leads to extensive conversations.
It’s your plan and your practice, so we’re happy to go with whatever you feel is best for your practice – however, we thought it would be useful to put together our findings on the outcomes of the various approaches as well as offer our advice on what does and doesn’t work.
To save reading the whole article, and if you’re just here for the straight-up answers, we’re putting the conclusion here at the top. Because why wait?
You can read the science behind this below if you want to know more about the why’s.point
Conclusion (spoiler alert!)
Put your prices up at renewal!
Unless your plan changes are radical and mean you need a financial rebuild (for example: adding in extra benefits), simply put your prices up a reasonable amount on renewal every year.
Use automatic system notifications to let people know.
Spend no money on price increases. Invest it instead in regular emails to your plan members, reminding them why being a member makes financial sense. This will make staying on the plan a no-brainer when their renewal comes around.
Retention is as necessary as gaining members
Keeping hold of members is easy if you regularly remind them why they signed up in the first place. Regular communication can also encourage members into the practice more often if you include educational pieces on how to be the best pet guardian possible.
Include good-news stories and information on other services that members might find helpful eg. New injections for arthritis, heart scans for breeds/age groups etc.
The science bit...
Change the price on a set date, or increase the price on renewal?
When we pay for a service monthly on an annual contract – whether that is Netflix or insurance policies – we expect that price to remain the same each month for the duration of that year, then to see the price increase on renewal. The EDD system is designed to support that way of doing things, and in fact, many practices include this in the terms and conditions that govern their relationship with their clients.
We’re all so conditioned to expect an annual price increase that we would be unlikely to notice if the cost stayed the same. A price freeze is sadly often just not noticed, whilst the subsequent price-hike after a few years is.
If you take the annual increase on renewal route, you don’t need to spend money on emails or letters explaining why you’re doing this, as it will be expected by your clients. The automatic system notification your clients will receive is enough. There is also no charge for us to put your prices up on renewal, unlike changing them on a set date. A set date change is a forced change that our tech team need to do.
Managing expectations is key to maintaining good relationships with clients. If you’ve said that the price will remain the same for a year after joining, then it will take some positive messaging to explain why you’re not sticking to your word. Any bad feeling is going to be associated with your brand. If someone joined your plan after much deliberation a few months ago and now they hear the price is increasing, the chances are they’ll feel a bit scammed. And need to vent. This might be to other pet-owning local friends, or it might be online, but either way, bad vibes spread.
Sometimes a forced price change is unavoidable.
You may have to remove outdated plan benefits or add brand-new features or even move to an all-inclusive model. Whatever the reason, the pricing structure is changing, so a forced change would be required in this situation.
It is essential that clients still feel valued and they can transparently see the reasons why you are changing the plan.
If you haven’t communicated with a client for a while and the only contact with them is to let them know there will be a price increase, then this must be carefully worded to remind them that their membership is still feature-rich and worth continuing with.
We can HELP you reassure your customers with regular communications. Our in-house marketing team can offer you a done-for-you service from copywriting, setting up email platforms, processing data and fulfilment at a frequency that fits your budget (monthly, quarterly, whatever suits your business. And, remember all our marketing is at 1/3rd off compared to the prices paid by non-Easy Direct Debit practices).
Forced price changes can be prohibitive. They can be a drain on your wallet and your team’s energy and time.
It would be more beneficial to invest the money you save on targeted, regular communication with these loyal clients throughout the year.
Keep reminding them of the benefits of being on the plan, the savings they make compared to non-members, the exclusivity of being the best pet guardians, member-only benefits and letting them know about other services they might need (but not realise they do yet).
Actions that trigger drop-offs
Clients feeling as if they’ve been scammed
Imagine yourself signing up for a plan, and then receiving a letter or email a few months later saying the price has gone up. You haven’t been a member before so you don’t have any history on the way the practice operates. Even if this is the first price increase in years, you will undoubtedly have a feeling of negativity about it. As a practice, this can be detrimental to your reputation, especially once the rumour mill starts.
Forgetting the benefits of being a member
You’ve talked to your client about the plan, you’ve explained how it’s going to be the best thing for them and their pet, they sign up… then a year down the line they can’t remember all the benefits, the savings they could be making and everything else they are entitled to. Your customer’s lives are busy, so it’s easy for them to forget all the great things about being a member. Using your social accounts, branded emails, and your website to remind them why membership makes sense. People don’t mind educational emails and reminders to use their perks. In fact they like it, and they like knowing you care enough to remind them to use their discounts and get what they’re owed.
If you’d like to talk to us about price changes, retention, growing your plan or in fact any other way our customer support and in-house marketing teams can support your growth, book a call now.