Last year, I raised prices twice (kind of – I’ll explain in a second), and I didn’t lose any clients. I’m here to tell you when to raise prices based on my experiences, but first, let me explain my price increases.
In September, I raised my hourly rate by 50 percent after being told by a few clients that I really ought to do so based on the extraordinary value I provide. Not only did that make me feel very loved, but it reminded me how much I know – something we all forget sometimes.
Then in December, I emailed a few clients who were being charged out-of-date rates (aka, low rates) and let them know their rates would be going up in 2016 to be on par with standard rates. I got a few questions, but I didn’t get a single, “Thanks but no thanks” email.
When to raise prices
You suddenly find yourself underpriced: If you hear a variation of “Wow, you’re really inexpensive” a lot, that’s a huge red flag that it’s time to raise your rates. You don’t want people to judge the quality of your service by your prices, nor do you want to be giving anything away for free.
Your clients tell you to: When more than one client tells you to raise you prices, ask them why. Their answers will speak volumes.
You are delivering far more value than you used to: Maybe when you started out, you did A, B and C, but now you do D, E, F, and G too – yet you don’t charge for those things. I already said it above, but I’ll say it again – do not give anything away for free. Ever.
You deliver stellar results: The more experience you have under your belt and the more you hone your skills, the better you can quantify your results. And people want results, especially if you help them grow their businesses (and can prove it).
How to do it without losing clients
Be straightforward and honest about it: Do not put a price increase in place without first telling your clients because you are afraid of the reaction you might get. Be completely honest about why you are raising rates. No sneaking around – we’re not in high school.
Focus on what they’re getting: In your message, emphasize the benefits your clients are getting from your services. If you’re adding new benefits, trumpet those, too.
Remind them of the results you’ve already delivered: It’s basic human nature to take the good things in our lives for granted. So remind your clients of all the goodness you’ve already delivered to them.
Don’t ask for permission: At the end of your note, DO NOT ask your clients if it’s OK to raise rates – and don’t apologize for raising rates, either. Just stick to the message of “I’m raising rates, here’s why, here’s what I deliver and here’s what you can expect going forward.”
Say thank you: Your clients could work with someone else, but they choose to work with you. Thank them for being your client, and do it with enthusiasm.
The last time you raised prices, how did you approach it? What worked well? What would you do differently next time?
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