‘How do I raise my prices?’ is a question I hear a lot from entrepreneurs and micro-business owners.. It’s a big topic that you and I will be wrestling to the ground on this blog. We’re gonna talk about how to set your price, but for now let’s focus on raising your price.
Let’s say you just completed surveying your audience and determined your ‘right’ price, the one that brings profits to your business, feels good and resonates with clients. You now know a lot of cool stuff like:
- what clients think of your brand (the experience they have with you)
- what customer appreciate most
- what problem you help them solve and why that matters
- what range of prices they’ve paid in the past for similar services/products
Yippee! You see an opportunity for an increase! Here are three ways you can strategically ease that new number into your small business.
Raise Your Prices
Across the board- all services and clients at the same time.
Set a date sometime in the future, not too far ahead that people forget-say a month- and go for it. Don’t forget to tell your clients:
- the reason for the increase (social psychology says we accept things better when there’s a reason. “Because” only works for kids)
- how clients can save (buy at today’s prices and save!)
- what happens if they don’t want an increase (give them alternatives like a lower priced, less valuable option or referrals to colleagues who match their pricing needs)
Why this works? It takes a ’1 and done’ approach. So, if you like to get things over with this might work for you. Possible pitfall? This is a lot to bite off, and it could be hard to not to freak out when some clients complain or leave. This feels like the most stressful way to do it.
By Service/Product- Pick one product/service and raise it’s price.
This one is self explanatory. Of course, you want to demonstrate a higher value for the higher price. But that’s not as hard as it might seem. Most of my clients struggle with seeing the full value of their offerings. You tend to downplay or underestimate what you do. However, just because something is easy or natural for you, don’t mean it’s not worth a lot to someone else. Quick example.
I know a very talented portrait photographer who saw the light about her prices. Originally, she said her clients thought of her as someone who takes pictures with a fancy camera. Not essential or unique. But once she re-evaluated all the steps she takes, her knowledge and experience and the results her clients get, she realized she can demonstrate more value and price accordingly. She’s not a photographer; she’s an visual essayist. She shares a family’s dearest stories on film. Now, that’s an essential that people will pay dearly for!
Which of your services could you re-assess to find hidden gold?
By Client Segment- add a new client or market & raise your price.
I like to think of this as the stealth approach. No big announcement. Just quietly adjusting upwards one client at a time. If you’re staying in your current market be prepared to explain the increase. You know clients talk, right?
Personally, I found it easier to raise prices when I moved to a another industry. I started consulting and training in the manufacturing industry with companies like Polaroid. I increased my rates when I entered the financial market and used my past successes as the proof of value. Here’s what I did for them. That’s why I can get the results you want at this cost.
You can do the same as a microbusiness. Find a related market to expand into, explore it’s profitability (yes, research) and create a pricing plan for them. Going back to my photographer friend, she could create products for mom photographers who want better casual, at-home pictures. Or add a business package where she takes photos for online use. She’ll boost her income even if she doesn’t raise her price.
What new market could you begin to tap into?