Maybe you’re finding yourself swamped with new clients, and you cannot refuse new ones who want to get on board. This issue is a beautiful problem to have as an entrepreneur. One of the ways to address this is by increasing your price. Your new price would act as a filter that would sift through clients without compromising your profit.
A price raise, by merely looking at it, would result in a higher profit. However, raising your price is much more than a surefire way to increase your bottom line. Instead, it communicates to your clients, to your industry competitors, and your very own company, of your solidifying brand.
If you’re in a place where you feel that you can already raise your prices, there are a few things that you might want to consider so that you can think that you are increasing your rates in integrity and that you’re not upsetting yourself or anyone else in the process.
1. Ensure that you are delivering value at that new price level.
You don’t want to be tagged as an overpriced product! Make sure that your services, pricing, and value are all closely linked to each other. One way to ensure high value is to also improve on your current product or service lineup. For example, if you’re going to double your price, you need to layer in more value to what you offer.
On the other hand, it might be that you’re already delivering a high-value product, but you’re pricing too cheap. Understandably, it can be scared to raise prices, as it might lose you clients both old and new, so understanding where you sit with that is essential as well. What is your level of confidence in terms of a price increase?
2. Give a guarantee to people who are coming on board with you.
If a price increase scares you, if you doubt your ability to deliver value at a higher price point, you can promise clients their money back if results are not achieved. Of course, you have to honour that guarantee, in case somebody demands for it.
3. Quote new clients with your new prices.
You might find it challenging to adjust your price with your current clients. Some business owners may lock in their existing clients at their grandfathered rate if the current price does not shortchange you. However, if there is a need to implement the price rise for current clients, communicate it to them at least two months before so that they have time to prepare.
It also helps if you explain to them the need for a price rise. For instance, you might have higher expenses now than from two years ago. Current clients who have been purchasing from you would likely take the price increase positively. However, you can go the extra mile by layering in some additional value for them. For instance, you can tell them that because they’ve been supporting your business since the beginning, you are throwing in freebies. You need to be able to communicate that it is more than a price hike, but a more valuable experience with your business all in all.
As you bring in new clients, observe how they behave towards your price. What are they looking for at your price level? You have to ensure that you can confidently and with integrity display the value that you’re going to give for your price point.
The next big question is: What should you be charging? To answer this question, you need to evaluate your level of value, the expenses required to deliver that level, and the reaction of clients to that price. It can be tricky to evaluate based on competition alone, as in some industries the price range is as full as £20 to £2,000 for something very similar.
There is a vast scope in many industries to set your prices where they need to be for the value that you deliver to your customers and clients. Getting your mind in the right place on your pricing is the first step to quoting those new rates and prices.