The inflation rate has been high recently. Most of us are still struggling with high consumer prices and a challenging economy.
Times like these can make it difficult for business owners to effectively negotiate contracts with both current and potential clients.
Don’t just say your costs have gone up
Avoid making decisions based on the present inflation rate. With your costs continually rising, it is tempting to simply raise your prices and assume the clients will deal with it.
Most clients are used to hearing that costs have gone up, and while they know it is true, they are likely getting tired of hearing it. You need to provide your clients with valuable reasons to enter or stay in a contract with you to keep your business stable and profitable.
Focus on the value of client relationships
While you should be mindful of your present circumstances and adapt as necessary, you should also think long-term. Before raising prices or acting unreasonable with contract negotiations, remember that maintaining good client relationships during difficult times can increase your chance of future success.
Consider offering a longer-term contract than you usually do. Even if inflation slows down soon, the overall economy is probably going to remain uncertain for years to come.
Knowing they have a long-term contract with a fixed price will make your clients feel more comfortable. You will also have the security that comes with knowing you have a longer contract.
When negotiating your contracts, you can still plan for potential changes in inflation, showing your clients that you are not burying your head in the sand and pretending the problem does not exist.
Provide incentives to stay with you even with a price increase
If you must raise prices, think about ways you can justify the increase other than inflation. Offer new or additional services that benefit your clients, without burdening you with too much additional cost.
Times may be tough, but the way you treat your clients now can determine the future of your relationship. Focus on growth and future opportunities.
Having the advice of an attorney experienced with contract negotiations during periods of inflation can help you make smart choices for your business.