Most all of my clients are facing this dilemma from both perspectives - as customers and as business owners. Their own suppliers are increasing prices or including surcharges, and at the same time they have to raise prices on their own products and services. It is unpleasant for everyone.

Review the Facts with Your Sales Team

If your current price increases are more significant than any you have issued in the past, you will have to first explain the situation to your own sales representatives. If, for instance, the cost of one type of raw material in particular has skyrocketed, and is the main culprit behind the price increase, educate your staff. Rehearse what you will say about the price increases until you feel comfortable, and then review the facts in a straightforward, non-apologetic, positive manner. They will appreciate your candor. All of your sales representatives go grocery shopping and fill up their cars at the gas station. They understand what's happening.

Draft a Letter to Customers

Work with sales and marketing to draft a letter that will go out to all of your customers explaining the price increases. You may want to come up with several different versions of the letter for different sizes or types of customers. Letters to your very best clients should be customized and personalized. However, none of these letters should go out until you, and eventually your sales representatives, have spoken directly with your customers about the situation.

Call the Top Accounts

As President, you should take it upon yourself to call or visit your organization's best clients, regardless of which salesperson handles the account, and tell them about the price increase personally. Let the salespeople know you are doing this, and involve them where necessary. When meeting with your valued clients, answer their questions directly and honestly. If these are some of your best customers, they are probably astute business people themselves, will understand what you are going through, and will respect you for telling them directly. By taking it upon yourself, you also help to show that you take the matter seriously, and that you are willing to take some of the heat off of the salespeople.

During the customer meetings, promise to confirm the price increases in a letter and make sure to follow-up on that commitment.

Use Initial Feedback to Guide the Conversations of Your Salespeople

Once you have made a few of these phone calls or visits, meet with the salespeople and talk with them about how the conversations went. Be honest about the customer's reactions to the situation, and go over the various questions they asked and objections they may have brought up. Then, tell them to call or visit all of their own customers and have a direct conversation about the upcoming price increase, just as you did with the top customers. It should be made clear that leaving voicemails or sending e-mails are not options.

Let your sales team know that your door is open if they want to discuss a particular account with you. You should meet with the sales representatives once they have made their first two or three calls to talk about the conversations, and review their progress to make sure that they are contacting all their accounts (not just the ones they feel most comfortable with). Get together with them regularly so that you fully understand what they are dealing with and so that they feel your support.

In order to remain in business not just through this recent economic cycle but for many years to come, most companies will have to take a hard look at their cost of doing business. Many will have to raise their prices accordingly. The sales department will no doubt feel the Impact of this situation as they interact with customers. Help them through this with a company-wide effort involving an effective plan, frequent communication, and teamwork.