3 WAYS TO RAISE PRICES

WHY:  DOING IT IS DIFFICULT BUT PROBABLY NECESSARY

Do you frequently find yourself tight on cash-flow?  Are you too busy - is your customer service dropping?  Are you attracting the wrong customers, ones that are unreasonable?  Tired of offering a particular service that you don't enjoy or that offers little profit?  Not enough time to pursue the things that are really important to you and your family?  

The answer to all these problems (and more) might be as simple as raising your prices.  
It's easy to say, but hard (and scary) to do.  On another blog post we will deal with why you should raise your prices.  But for now, lets assume you've realized that a price increase is needed.  How can you implement your decision?  

*something to consider before you think about raising prices:  Am I as busy as I want to be?  If not, raising prices may not be your first priority.  Although, low prices may be driving good potential clients away...

1. Do it annually.  Blame the calendar.  Everyone understands that inflation drives prices up from year to year.  You can present it as '2015 pricing'.  Its the perfect time to adjust your prices.  It might feel too random or arbitrary if you implement a price increase mid-year.  You can also use it as incentive to get clients to commit prior to a scheduled price increase.  It's not too often that I work on an hourly charge, but I have forced myself to increase my hourly rates every year for the last 7 years.  If you don't give yourself a raise, no one will do it for you.  Even if it's just $1/hour, it's the principle - you've worked hard and gained valuable experience over the past year.  If you had a regular job you likely would get some sort of raise, so why treat yourself worse than what you would expect from another boss...

1. Stop caring about the potential consequences.  Experiment with a service or client that you no longer care if you lose.  Do you have some D grade clients that are sucking up your time and increasing your stress level?  Do you dread it when a client hires you for a service you hate doing?  Double your price.  You can do that.  Chances are nothing will happen.  You will make more money and it will make dealing with the situation more bearable.  Decide ahead of time that you are OK with potentially losing some jobs.  If you do lose a few, you're still ahead of the game. 
2.  Do it gradually for loyal clients.  If you double or triple the price on some of your original and loyal clients, you will surely lose a lot of them.  They deserve better than that.  You will have to be reasonable with your increases if you want to keep them.  You may want to itemize your invoice at current pricing and then give them a loyalty discount.  If you are busy, you may want to test out higher pricing on new leads.  For example, referrals may be a little less price sensitive than people who call you (and four other companies) out of the phone book. 
3. Remember that you are likely not your own customer.  Your new pricing may frighten you a little.  You might think to yourself: 'I would never pay that!'.  That is probably true.  But you may not be the best judge of what your service is worth to your clients - you probably are not part of your target market.  So don't let your feelings about what you would be willing to pay limit what you can charge.

There is certainly a lot more to discuss when it comes to pricing your services optimally.  For now I hope these points gave you some creative ideas to price so that you can deliver true value.

How do you increase your prices?



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