How to Raise Your Prices in 2022
Have you been putting off raising your prices? It may feel uncomfortable or even scary, but all businesses need to navigate this periodically. Before you start to list all the reasons you don’t want to raise your prices this year, hear us out. We’ve got an objection-busting post for you to empower you to implement the price increase your business needs!
Why should I raise my prices?
Firstly, remember that you a provider of skilled and personal services, and your prices should reflect your level of expertise and professionalism. You’ve put time and money into learning and perfecting your art, and now it’s payback time – literally. Don’t succumb to limiting beliefs and fears around your service not being ‘worth’ any more than you’re currently charging. Your pricing should take into account not only your time (which is valuable in itself), but also your talent, experience, and all of your overhead costs, including premises, supplies, staffing….we could go on, but you’re the expert here and you know how many costs you incur running your business. Your costs are constantly increasing and, at the same time, your level of experience is also increasing; so, taking those two factors into consideration, how can you NOT raise your prices? If you’re not convinced yet, remember that you also don’t want to be undercutting your competition’s pricing as an ongoing strategy. Why? Because this devalues the industry.
What if I lose clients?
Whilst you need to be realistic about the possibility that a price increase may result in the loss of some clients, remember that your increase in price will help to make up for the short-term shortfall.
Also, whilst you may lose some clients because they don’t want to pay or can’t afford your higher prices, this means capacity in your books for those clients who WILL pay more. Keep that goal in sight!
How do I implement a price increase?
Consider your longer-term strategy before deciding by how much you want to increase your prices.
Whilst you don’t want to wait too long between increases, putting up your prices too often can also be frustrating for clients. Generally, though, increasing by a small amount on a more regular basis is easier than waiting for years and then being forced to make a huge step up.
One strategy is to include ‘from’ pricing on your website and any printed collateral materials you circulate to clients; this allows you to make small changes to your prices without having to publish new information.
Now is the perfect time to evaluate whether or not your pricing accurately reflects the distinction between various service levels (for instance, you may only implement a marginal increase for more basic services, but your more specialist or premium services may be increased by a greater
percentage, as these are easier to justify).
In order to sweeten the change for your loyal client base, you may wish to continue to make your old prices available to them for a bit longer, and charge new clients the new price with immediate effect.
How do I communicate the increase in price?
Firstly, it’s absolutely key to ensure your team are fully informed and on board with the changes, in order to maintain consistent messaging and avoid any possibility of the old (wrong) pricing being given out after it’s been changed.
Make sure you communicate the planned increase well in advance, in order to give your clients plenty of notice and time to get used to the idea. This also shows that you’ve put thought and planning into the increase.
Change of any kind can be difficult. When communicating the new pricing to your clients, whether verbally, by email newsletter or social media, be empathic, but not apologetic. Reference increasing business operating costs and the rise in product prices and explain that these increases are being reflected in the your pricing. It can also be effective to mention that prices are being raised in order
to maintain the same high level of service clients have come to expect.
You deserve it. Your business deserves it. So no more excuses – go out there and raise your prices!
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