Should you raise your prices?
Well, as prices continue to rise, you’ve probably noticed that your cost of doing business has increased as well.
With that in mind, you may consider raising your prices, and you should. After all, the main point of all businesses is to make money, and you can’t do that if you’re not breaking even.
Read on to find ways on how you can raise your prices and how to tell your customers.
Accept that you have to do it
Raising your prices can be daunting, as the danger of losing clients will be front of mind.
The bottom line is you cannot deliver quality service if you’re not charging enough. It’s that simple.
You’ll lose customers if you’re constantly spinning your wheels trying to make a difference. As you won’t be able to deliver the fantastic service you’re known for if you’re overworked and continuously trying to find profits elsewhere.
Raising prices is just a part of doing business. It doesn’t make financial sense to try and swallow the costs to please your customers. With that in mind, remind yourself that you’re doing the right thing for yourself and your clients.
Understand what’s costing you more
At minimum once per year, consider what your business costs. Look at which services or products are profitable and which aren’t. Then take it a step further and pinpoint the breakeven position for each area.
You will be able to calculate how much more you need to make to be comfortable and, most of all, profitable. Evaluate all avenues, staff wages, supplies, rent, utilities, bills, training, etc. Regularly doing this will show you which areas cost you more over time. Those that cost you more will likely benefit from a price increase.
Decide your approach
A blanket increase would make sense if prices went up across the board. However, if you find that only some of your supplies or services now cost more, raising only those prices might be a good idea. Your customers will appreciate only the necessary cost increases.
Gauge the satisfaction level of your current customers
Customers who believe they’re getting excellent service will be happy to continue paying for that, and they won’t bat an eye when you inform them of your increase.
If your customers are currently not satisfied, a price increase will be the excuse they use to leave. This isn’t necessarily bad; some of the lost profits will be made up by the price increase to other customers. And clients who are unhappy could become long-term headaches for your business.
Give a lot of warning
Let your clients know your plan by emailing them three months before your planned increase. State the reasons why you’re raising your prices now.
Emphasize that this change is necessary for continuing to deliver high-quality service. Providing notice to your clients, to ensure they have enough time to react and prepare, shows you respect them.
Send a more personal message to long-time clients and ones that hold significant accounts. This shows that you care about their reaction and allows you to listen to their queries.
Keep the communication lines clear
Most clients will be fine with the price increase. Some will likely have concerns, questions, or even complaints. Focus on answering their questions.
This isn’t a hard sell; it’s a conversation. Because you’ve done your research, your increase is wholly justified. As you take the time to talk with your customers, they will come to understand. Remember, you aren’t asking for their permission; you’re letting them know of the decision to do so.
Communicate your value
Don’t be worried about bringing up what you’ve delivered them in the past. By reminding them of the excellent service you’ve already provided, they’re likely to come around.
It’s a good idea to provide options if they’re still hesitant, but don’t give away more than you can. For example, you could offer to charge them the same but take off some of the services included. You can try and find a middle ground that works for both of you, alleviating their cost and your workload.
Final thoughts
Remember, if you already have regular contact with your clients, the conversation around rising prices will be much less awkward.
Once you’ve researched and informed everyone, go ahead and confidently raise your prices. By doing so, you’ll be able to continue providing your clients with amazing service.
If you have any questions or would like some further tips on how you can raise your prices feel free to Join the conversation…