Is It Time To Raise Your Prices?
There comes a time in every business’ life when raising prices is necessary, but very rarely is a business owner pumped about the prospect. The fear of the unknown is strong in this situation.
The what-if scenarios go something like this:
What if I upset the people who have been buying from me and they feel betrayed?
What if people don’t think what I do is worth more money?
What if raising prices results in immediate failure?
In order to feel confident when raising prices you must understand your value.
Pricing is a strategic and important part of your business model, so it is a good thing to be concerned about how price affects the growth of your business. It is also important to know that people will pay for an exceptional experience. When you raise your prices, you raise the expectation of the customer. If you can deliver, a price increase communicated in a thoughtful way can positively affect your business.
Here are a few ways to know if what you do is valuable enough to raise prices:
- Your sales are steadily growing.
- You are providing consistent results for your customers.
- You have strong relationships with your customers.
- You have invested in improving the experience you provide.
- You are confident that the experience you provide is exceptional.
If you are nodding your head yes to the above listed points, it is time to raise your prices.
Here is a list of REALLY bad reasons to raise your prices:
- You need cash.
- Your expenses are increasing, but what you offer to your customer hasn’t changed.
- Competition is taking business from you, so you need to maximize what you earn per customer.
So let’s say that yes, it is time to charge more for what you do. How do you make that happen without pissing people off? Follow the steps below:
4 Steps to Raising Prices Without Losing Customers
Step 1: Remind your clients of the results you have provided. Tell them why what you do for them is helping them.
Step 2: Time your price increase with an improvement of service or communicate what recent improvements that have already been provided.
Step 3: Notify your customers of the price increase in advance, so that they don’t feel backed in a corner with no options.
Step 4: Offer a referral to another provider if they do not wish to go along with the new price. This is where your confidence is of the utmost importance. Some people are more price-sensitive than others, and that has nothing to do with you.
Check out this real life example from my client, Oh So Clean.
I have thoroughly enjoyed working with you to provide a consistently clean living space! I value your business as a client, and look forward to keeping your home sparkling in the future.
It is my hopes that I have provided more time for you to enjoy the things you love most, whether it be family, traveling, helping out with school events, or entertaining guests in your Oh So Clean home! Allowing you to enjoy those activites is why I created Oh So Clean :)
I would like to let you know that I will be increasing my rates as of Friday, July 15th. Your new rate plan will be _______ for each cleaning. If this does not work for you, I can offer a referral for cleaning services that may provide a pricing schedule that works better for your needs.
If this plan works for you and your family, I would love to provide a complimentary 20-minute home organizing session for a room or area in your home! This would include an evaluation and written plan of how to make the space work in a way that makes your life easier, and more organized!
My goal for Oh So Clean is to provide a premium home cleaning service that is reliable, trustworthy, and pays attention to detail. I would love to continue to share in this journey with you and your family.
If you are still not sure if raising prices makes sense for your business, check out this video from one of my favorite online coaches Marie Forleo.