How Do I Increase My Prices Without Losing Clients Or Feeling Guilty?
Nov 17, 2021
There are times when you write a blog post in the hope it will resonate with your audience... there are other times, like this, when you write in direct response to a question you're repeatedly asked... So I KNOW you want the answer to this one!
If you want to earn more money (and you're not ready or inclined to move to a passive income model) then you have two choices... work with more people or charge more.
If you already feel yourself teetering on the edge of burnout, or preferably, like one of my clients, you're now at capacity time-wise and so are operating a wait list, then really your only option is to increase your prices.
How do I know when it's time to increase my prices?
I want you to think about these 4 things and be honest... do ANY of them apply to you?
1. Are you at capacity / booked out / operating a wait list?
Being 'at capacity' means different things to different people, it's entirely personal, so I'm not about to get prescriptive about how many clients you should or shouldn't be working with, but I believe we all know the feeling of having taken on too much. The fear of being unable to deliver on a promise because our schedule is simply unsustainable.
Even those who sensibly open a waitlist... unless it's a short, moving list, then the chances are you're too cheap for your reputation...
Think about it, if you doubled your rates and lost half your clients, your income would be unaffected...
Now, I'm not suggesting you would want to double your rates for existing clients (though it's your business, your rules, remember) but I've certainly had clients double their rates for new clients and they've actually seen very little change in the number of enquiries they've received as a result.
2. Do you take on clients that demand a quick turnaround?
Fast, Cheap & Good... you can only pick two... I'm sure you've heard that before. But do you price your service accordingly? Do you accept 'urgent' jobs without charging more? Do you have clients who need you to 'just do a quick review' of something, and 2 hours later your resentment level is through the roof?
If you don't want to put tighter boundaries in place (I fall into this camp) then my advice is to think about having a two-tiered pricing structure. Your standard price and then a premium 'quick turnaround' price (IF your schedule allows you to do that).
3. Do you have some high-maintenance clients? (you know the ones)
In my experience, my higher ticket, one to one coaching clients are, without exception, a pleasure to work with. Unfortunately, years back, when I was working as a VA and charging way to little for the service I delivered, there were a couple of clients who actually had me in tears with their unreasonable demands and drama.
But guess what, when I finally decided to increase my prices to reflect the service I delivered (and I actually more than doubled my hourly rate - I went from £25 per hour to £65 per hour #radicaltransparency), I started attracting my perfect clients... Entrepreneurs who valued me and the exceptional service I gave them.
That was a few years ago and a completely different business to the one I run now, but it was a lesson that's stayed with me.
Trust me, feeling empowered to say no to clients you just know are not going to work out is priceless.
4. Do you deliver an incredible service / get amazing results for your clients?
Your experience and your pricing should grow together. Think about a hairdressing salon... sometimes you can get a free cut with an apprentice who's practicing, but if you want the senior stylist be prepared to pay more (and if the salon owner agrees to cut your hair as one of her select personal clients, be prepared to pay a premium price).
Now, that doesn't mean that if you're just starting out, you have to be 'cheap'... it means that your pricing should really reflect the service / results you deliver.
If you get amazing results for your clients then you absolutely deserve to charge accordingly.
So, if you answered yes to ANY of these questions then I want you to seriously consider increasing your prices.
How do I communicate my new prices?
Firstly, don't overthink your pricing strategy... in fact there really is no strategy... just pick a number. Seriously there's no science to this - it's your business and you get to charge what feels right to you. I mean, you could increase the prices on your website by x% but to be honest I'm not a fan of complicated numbers - I like round numbers that look and feel right to me.
The biggest obstacle you'll need to overcome is your own mindset...
What if no one will pay my new price and I can't pay my bills, lose my house, have to live in a cardboard box and sell my first born?
Annnnnnd breathe....
Remember, it's in both your AND your future clients' interest to increase your prices to reflect your value...
1.Undercharging and overworking leads to burnout - how can you help future clients if your business is unsustainable?
2. Undercharging reduces the PERCEIVED value of what you do. People may not trust that an offer priced so low would deliver what they're looking for.
3. Clients who invest in themselves / their businesses SHOW UP. They do the work. They focus. They get the results.
So, in terms of announcing your new prices - simply update your website and anywhere else that shows your pricing, and do it unashamedly with confidence and pride.
How do I increase my prices for my existing clients?
Maybe your business model is such that you just increase your prices for new clients and keep existing clients on their current rate until the end of your engagement. Certainly, for clients on retainer, you wouldn’t increase your price until their contract is up for renewal.
But what about clients who you work with on an ad hoc basis? And those retainer clients, what happens then their contract IS due to renew? How do you let them know about the pricing increase while still retaining them as a client?
Truth? Sometimes you won’t.
Sometimes your clients won’t want to carry on working with you at your new price… but that’s ok.
If they’re no longer aligned with your pricing then the absolute right decision for them might be to find someone who they ARE aligned with.
But, in my experience, if a pricing increase is communicated well, most clients understand and are willing to pay more to keep working with you (and keep getting the service / results you deliver).
Just remember the value you add to those clients. Re-read testimonials you’ve received. Be confident that the pricing increase is for the benefit of your business which in turn benefits your clients.
You don’t ever have to feel guilty about charging your worth.
Having the conversation
I recommend booking a specific 30 minute meeting with your clients to discuss your pricing for the renewal of their contract (or to let them know about your increased prices for ad hoc work).
Be sure to speak slowly, clearly and confidently. As you tell them about the increased cost of working with you, make sure to let them know you love working with them and allow them time and space to interject and agree with you / tell you how much they love working with you.
You’re not asking for their permission.
It’s not a negotiation, you don’t need to apologise, and you don’t have to justify your decision in any way.
You MIGHT consider offering repeat clients a bonus of some kind to reward their loyalty (not as a bribe to get them to stay with you). Maybe an extra session with you / an express service for a week / voxer access to you for a limited period / free access to another product or service. Not something that will bog you down in delivery, but a token of appreciation for their continued support.
Be sure to give your clients good notice in advance of a pricing increase (ideally 30 days).
Make sure you follow up the conversation by email setting out clearly when the increase comes into effect.
Turning your pricing increase into an opportunity
Here’s a quick checklist to turn your pricing increase into an opportunity that could see an influx of clients through the door:
- Email those you’ve previously had discovery calls with (the ones you felt were a good fit for you) and let them know you’re about to increase your prices. Encourage them to sign up with you now before the increase comes into effect.
- Email your full prospect list and post on social media - let people know about the increase openly and transparently – again, give them the chance to ‘get in quick’ before the price goes up.
- You might consider putting a countdown timer on your sales page / website.
- IMPORTANT – act with integrity. If you say you’re prices are going up then see it through. Increase your prices on the day you said you would.
Finally…
Remember, it’s your way AND the highway. You get to set the rules here. Want to review your pricing annually? Great – pop a recurring task in Asana.
Prefer to wait until you’re launching a new offer? Perfect – do that.
There are no pricing police.
There’s no right or wrong answer and you can change your prices as often as you like.
By all means, when it comes to pricing, do your research and see what the market rates are, but MOST importantly, go with your gut, with what feels right to you.
You need no one’s validation but your own.
Money mindset is our theme for November in The Founders Society. Not a member yet? Holy Moly you're missing out... click HERE to find out more.
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#080 - How To Find Your Pricing Sweet Spot
