What if I told you that you can double your prices without losing half of your clients?
It sounds extreme, I get it, but it might be what you need to do!
Like many other entrepreneurs, I started my first real business without a lot of high costs, and pricing was something I based on gut feeling instead of a well-thought financial plan.
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That's the first mistake I made. Never set your prices based on your gut feeling.
What happens as you grow is that you start making more costs; perhaps you need an office, or you need to hire an accountant to keep track of your books, and instantly your costs are adding up.
Suddenly, it turns out your prices are way too low, and at the end of the month, you don't have anything left in your bank account.
On top of that, you have worked yourself to the ground with nothing left to give. You're exhausted.
If that sounds anything like you, it's time you raise your prices.
“Aaaaaaaaaah,” I hear what you're thinking, but don't worry.
I'll give you 5 tips on how to raise your prices, so you can confidently communicate your price changes to new and existing clients: how to say it, what to say, and when to say it.
Tip #1 Why should you raise your prices?
Let's make it clear from the get-go: money is not just a monetary thing. Money is energy. And energy lives everywhere.
If you're spending time and energy on delivering a service, and you're not getting enough back, your energy is imbalanced.
As you grow, upskill yourself, and become better at what you do, your energy shifts. It makes sense that you need more input in return for the output you give to clients to feel in balance.
The same goes for team members, for instance. If you pay someone too little for the output they provide, it will be far more appealing for them to go somewhere else.
So, why do you need to raise your prices? You deserve to feel good in your business; you deserve to feel valued and to have your energy in balance. You can fix your energy by raising your prices.
Tip #2 What is your worth by the hour?
I don't expect you to know this by heart, and that's why I have created a straightforward framework for you to calculate your hourly rate.
Download the Pricing Guide here.
In the Pricing Guide, you will get very practical action steps on how to calculate your hourly rate, starting from questions like:
What do you want to earn in a year?
How many productive hours do you have in a day?
More questions like these help you break down this big decision into blocks of smaller decisions. I know it's a difficult topic to talk about, so go step by step.
Once you have calculated your hourly rate, DON'T get caught up in a web of worries thinking,
“That's too big of a difference with what I'm asking now,” or “That's not what my competition is asking.”
This is about you and your business!
You need to know what you're worth, so calculate it to know what you want.
Tip #3 Who should pay your new prices?
This is really up to you. Should your new prices apply to new clients, existing clients, or everyone?
Before you get stuck here, look at the situation as if you were about to start fresh:
- Who is your ideal client?
- What do you want them to pay you? (use the Pricing Guide for this).
In an ideal situation, all of your clients should pay you the same, but you may consider creating a special setup for existing clients.
Maybe you have been working with someone for a long time and want them to continue paying the old rates for a set period of time, so they can gradually ease into the new rates you've set up.
This way, your new clients can start at your newest rates.
However, don't build too many traps into your own business by making too many exceptions for clients. Set a deadline and make sure by this time, all of your clients pay the same rate.
The question is, how do you communicate this price change to your existing clients and new clients?
Tip #4 How do you communicate a price change?
First of all, remember that changing your prices is a business decision, so when you communicate the price change to clients, leave any emotions out.
Avoid phrases like,
“I'm sorry that…” “I feel like…” “I think…”
This is a business decision, and the same rules apply for communicating a price change as pivoting your business. In fact, consider changing your prices as a type of pivot.
In a previous episode, #88 of The FastForwardAmy Show, we dived head down into pivoting and communicating this to clients. Read the recap here.
Okay, you're ready to tell your clients about the price change, and as you do, here are few key pointers:
- State your decision: no matter if someone is a new or long-term client, state your decision, and be very upfront about the price change.
- Make a deal for existing clients: people love to feel valued, and your clients are no different. Let existing clients know that your new rate will apply to them starting in two months. It's a way to show appreciation for your long-standing collaboration.
- Tell clients personally AND online: announce price changes on your website and in your appointment scheduling system. Be upfront and transparent so clients know what to expect.
- Don't be afraid to talk about pricing: be confident about your prices and stand behind what you're selling. If you don't believe in what you're selling, your clients won't either.
Tip #5 When does your new price apply?
You know why it's time to raise your prices. You know your rate, who it should apply to and how to communicate it.
Lastly, it's time for you to decide when this new rate should apply.
Ideally, your price increase should start from today because you've probably waited too long already.
My best tip: give yourself and your clients a month, and make sure you put a date on when the new rate will be applicable.
This month will provide you with some buffer time to communicate the changes to new and existing clients, and when you do that: be kind, respectful, and transparent to manage expectations.
Now, let's go—no time to waste.
Good luck!
Watch this episode on YouTube or listen via iTunes, Spotify, or wherever you get your podcasts, and search for episode 91 of The FastForwardAmy Show.
PS Don't forget to go and grab the Pricing Guide to
- Get practical action steps on how to calculate your hourly rate.
- Get confident to ask the right price because you know you're worth it.
Download the Pricing Guide here.
PSS Next week, we'll be re-opening the doors to the Business Freedom Elevator™. I decided to create the BFE™ so you don't have to go through the struggles of finding what to do first and how to do so. This 6 month online business coaching program will help you go from broke and burned-out, to fully booked with ease! You'll get 9 modules in this online course, covering every aspect form sales, email marketing and content creation to energy management and the entrepreneurial mindset. So, what will you get in the BFE™?
- Life-long access to the 9 video modules, including assignments, helpvideos and bonuses
- 1h of live coaching with Amy, Team FastForward and guest coaches every week
- Access to the BFE™ support community, in which you'll find full support by team FFA and your fellow coachees
Register for the waitlist now through https://fastforwardamy.com/elevator and be the first one to know about the opening of the doors, exclusive offers and bonuses!
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