I recently went to my local vehicle oil change place and there was new branding and a new owner – Valvoline. They raised the prices, about doubled them and provided dramatically different, faster and maybe even better service.

As a small business owner, the prospect of raising prices can be daunting. You might worry about losing customers or facing backlash. However, when done strategically, increasing prices can be a powerful tool for growth and improvement.

Why Raise Prices?

1. Reflect improved quality or service
2. Offset rising costs
3. Invest in business growth
4. Attract customers who value quality over price

The Valvoline Example: Adding Value Justifies Higher Prices

Consider how Valvoline transformed the oil change industry. They began acquiring local oil change shops and implemented several key improvements:

• Integrated technology for smoother operations
• Streamlined the payment process
• Introduced stay-in-car service

These changes resulted in a faster, more convenient experience for customers. Valvoline could justify higher prices because they were offering superior service.

Another thing about Valvoline is that their staff are very friendly. They SHOW YOU the dirty (or clean) filters in your car that might need to be changed. This builds trust.

Strategies for Small Businesses

1. Enhance Your Offering

Before raising prices, look for ways to add value:

• Improve product quality
• Offer additional services
• Enhance customer experience

2. Communicate Clearly

Explain the reasons behind your price increase:

• Highlight improvements or added features
• Be transparent about rising costs if applicable
• Emphasize the benefits customers will receive

3. Segment Your Customer Base

Recognize that not all customers will accept higher prices:

• Identify price-sensitive customers
• Focus on retaining customers who value quality
• Target new customers willing to pay for premium offerings

4. Implement Gradually

Consider a phased approach:

• Introduce new, higher-priced options alongside existing ones
• Gradually phase out lower-priced options
• Give long-term customers advance notice or special rates

5. Showcase the Difference

Make your improvements visible:

• Before-and-after comparisons
• Customer testimonials
• Demonstrations of new features or services

Embracing Change and Growth

Remember, it’s normal to lose some customers when raising prices. However, by focusing on delivering superior value, you can attract new customers who appreciate quality and are willing to pay for it.

Many customers seek more than just the cheapest option. They want reliability, exceptional service, and a great overall experience. By continually improving your offering and aligning your prices accordingly, you position your business for sustainable growth and success.

Raising prices isn’t just about increasing revenue—it’s about evolving your business to serve customers better. When done thoughtfully, it can lead to a more loyal customer base, improved services, and a stronger, more profitable business.

Related articles:

4 Reasons to Raise Your Prices(Opens in a new browser tab)

Costco Is Raising Prices. Should You Raise Your Prices?(Opens in a new browser tab)

Setting Your Best Price. Here’s A Step by Step Guide.(Opens in a new browser tab)