“What are we going to do? There’s no way the customer will accept this increase.”
I still remember hearing my sales manager say those words as we prepared to meet one of our largest customers.
It was 2008, oil prices had surged, and steel prices were climbing. We were losing money on this product line. There was no other option. We had to raise our prices.
Our product manager submitted the final numbers earlier that week, and it was a staggering double-digit increase. So we prepared.
We anticipated every objection the customer might raise. We discussed how competitors might use the increase against us. We even role-played difficult conversations. Every possible outcome was discussed, except the one that actually happened.
With a knot in our stomachs, we walked into the boardroom. Procurement was there, along with the vice president of operations. We began explaining the situation. “As you know, oil prices have increased significantly, and our material costs continue to rise...”
Looking back, I’m sure the customer could sense our anxiety. We were so focused on justifying the increase as we nervously explained the market dynamics. We were doing our best to convince the customer (and maybe ourselves) that it was fair and reasonable.
Finally, we got to the point. “Beginning next month, your new pricing will be...”
Silence.
The vice president of operations looked down at the proposal, paused for a moment, and then looked back up.
“Okay,” he said. “That seems reasonable. Your costs go up. Our costs go up. I understand.”
That was it.
No heated negotiation. No threats to leave. No demands for concessions. After days of imagining the worst, the customer simply accepted the increase.
Why do we spend so much time anticipating the worst, when we could just as easily prepare for the best?
Few conversations create more anxiety for sales professionals than discussing price adjustments. On the desirability scale, presenting a price increase ranks up there with inputting data into the CRM.
The concern is understandable. Salespeople worry about damaging relationships, losing business, or creating opportunities for competitors. Yet avoiding necessary price adjustments is a far greater threat. Delaying necessary price adjustments gradually erodes the organization’s ability to invest, innovate and remain competitive.
The challenge is not whether a company should adjust prices. The challenge is how to do it successfully. Organizations that consistently navigate price adjustments excel in three critical areas:
- Embracing the right mindset
- Positioning the adjustment effectively
- Responding confidently to objections
Mastering these three areas transforms price adjustments from uncomfortable conversations into growth opportunities.
Embrace the Right Mindset
Before you expect customers to buy into the adjustment, you must buy into it first. The key conversation is not the one in front of the customer; it’s the conversation between your two ears. If you believe customers will react negatively or see lower-priced alternatives, you may inadvertently create a self-fulfilling prophecy.
Instead of viewing price adjustments as a necessary evil, view them as part of managing value. Here are three positive attitudes when pushing through price adjustments:
We Are a For-Profit Organization and Profitability Matters.
If your company’s website ends in .com instead of .org, you’ve earned the right to make a profit. Profit is not a dirty word. Profit enables organizations to survive, grow and continue serving customers. A healthy company is better equipped to create value for customers than one that is constantly struggling to stay afloat.
We Deserve to Be Compensated for the Value We Create.
When you create a superior customer experience and provide quality products, you deserve to be compensated accordingly. At its core, pricing is an exchange of value. Customers willingly pay more when they receive greater value. Organizations that solve problems, reduce risk and improve outcomes should charge more for greater value.
Customers Prefer Financially Healthy Partners.
Would you bet your future on a supplier that is constantly cash-strapped or financially struggling? Most customers wouldn’t. True partnerships require stability and long-term commitment from both parties. Customers want suppliers who will be there tomorrow, next year, and five years from now. They want partners that can continue investing in inventory, service, support, innovation and talent.
Attitude drives behavior. You move in the direction of your thoughts. When salespeople embrace these beliefs, they communicate with greater confidence and credibility.
Position the Price Adjustment Effectively
Once the right mindset is established, the next challenge is communication. How a price adjustment is presented often matters as much as the adjustment itself. Customers do not simply evaluate the number. They evaluate the context surrounding the number.
Avoid leading with the adjustment itself. Instead, begin by discussing the broader business environment. Customers understand rising costs because they’re experiencing them, too. Nearly every business is affected by labor costs, transportation expenses, fuel prices, inflationary pressures and material costs.
Words matter. Whenever appropriate, describe the change as a pricing adjustment rather than a price increase. An increase often implies an attempt to improve margins. An adjustment implies responding to changing business conditions. This subtle distinction helps customers focus on the reason behind the change rather than the change itself.
Equity plays a major role in every price adjustment conversation. The moment the price changes, customers start asking themselves, “Is this still worth it?” This creates a value gap. The best way to close that gap is to remind customers of the value you consistently deliver. Review examples where your team went above and beyond, solved critical problems, or reduced the customer’s total cost of ownership. Reinforcing your value helps justify the adjustment.
Respond Confidently to Objections
Even the most thoughtfully planned and professionally communicated price adjustments will generate questions and concerns. Some objections should be expected. The goal is to address objections confidently and professionally. When objections surface, they often signal that the customer is engaged in the conversation and trying to determine whether the adjustment is reasonable and justified.
The no. 1 reason buyers push back on higher prices is a perceived lack of equity. They don’t believe the new price is fair. Try reframing the conversation around fairness. Highlighting fairness and reinforcing value can help justify the increase. For example:
“At first glance, it’s easy to view a price adjustment as an attempt to increase profits. However, the purpose of this adjustment is to ensure we can continue delivering the value, reliability and support that our customers depend on. The adjustment allows us to maintain higher inventory levels that minimize disruptions and employ experienced professionals who provide timely service and technical expertise. Given the value we provide and the investments required to sustain that level of service, do you feel this adjustment is unreasonable or unfair?”
This approach encourages customers to move beyond emotion and evaluate the situation objectively. Rather than focusing solely on the price change, it shifts the discussion toward the value being delivered and the fairness of the adjustment.
Price adjustments don’t have to be the anxiety-filled experience many salespeople anticipate. Planning and preparation build confidence, and confidence changes everything. When you understand why the adjustment is necessary, believe in the value you provide, and prepare for the conversations ahead, you can approach customers with conviction rather than hesitation.
When these three elements work together, a price adjustment becomes more than a conversation about cost. It becomes an opportunity to reinforce value, strengthen the customer relationship, and build trust. That’s a conversation worth having.
Paul Reilly is a speaker, sales trainer, author of Selling Through Tough Times (McGraw-Hill, 2021), co-author of Value-Added Selling, fourth edition (McGraw-Hill, 2018). For additional information on Paul’s keynote presentations and seminars, call 636-778-0175 or email [email protected]. Visit www.TomReillyTraining.com and sign up for the free newsletter.
This column originally appeared in the July/August issue of Industrial Distribution magazine. Subscribe here and sign up for ID’s Today in Industrial Distribution daily newsletter here.
