Informing customers before a price increase

Just on a week ago, the prices of all our drinks and food went up 5%.  We also did something that I don’t think any other cafes do – we told our customers about it well before it happened.

We picked the 1st August as a good time for the increase. In early July, we sent out an email to 800 of our loyalty system customers, advising them of the prices going up.

This is a very rare event.  Our food prices last went up three years ago.  Coffees haven’t changed since we opened (seven years ago).

Why tell our customers about this? We’ve always kept them in the loop because I think it’s good to be honest and transparent with your customers, and they will be loyal because of this.

Part of me dreads a price increase as I envisage having all our customers complain, and a mass exodus of them who never return. What happens is most ignore the fact, and the few that do mention it tell us how they appreciate being told, and their future custom with us doesn’t really change at all.

The reality of price increases is they need to be done regularly as our overheads don’t get cheaper, they only gets more expensive.  If we want to make a decent return from the café, our pricing to our customers needs to increase as well.

We (businesses) need to stop treating customers as just an income stream, and bring them closer into the feedback loop.  We really have nothing to lose.

 

 

2 comments

  1. Rachel · August 7

    It’s strange you should write this post as I discovered your blog a couple of days ago when googling the best way to increase coffee prices – what a coincidence! We need to increase our prices slightly and am also thinking of putting a notice in front of the till to inform customers in advance. Im worried about drawing too much attention to the increase but equally worried about upsetting regulars!

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    • tuihanacafe · August 7

      As long as it’s an incremental increase (so nothing major like a 50%) and you’re upfront with your customers about it, I don’t think they’ll have a problem with it.

      You may have one or two regulars who have an issue, but in my experience, this is definitely the exception to the rule.

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