I meet so many business owners that feel they should put their prices up but are fearful of doing it. In this situation I always ask one question…How often do you lose business based on price? Very often the reply is either “never” or they will remember the one time they did.
If you have a similar answer to that question then there is definitely room for you to put your prices up. It’s very easy to convince yourself that price is a huge barrier to someone working with you, but if it’s rare that you lose business based on price then you are putting up a barrier to moving your business forward that doesn’t exist.
The next objection I usually get when I’m suggesting that my client’s put their prices up is that their current clients would object. That is a totally valid concern and there are several ways to manage this:
- Introduce the increased pricing to new clients only. I would strongly suggest that you write to your existing clients and let them know you have increased your prices for new clients only as you value the continued support from your existing client base.
- Write to your existing clients and let them know that in X months you will be increasing your prices and explain why you are doing it (inflation, increased costs, value you deliver, and make sure you can demonstrate it’s still competitive).
- Depending on how you structure your pricing you may not even have to explain you have increased your prices as your clients may not see that degree of granularity in your proposals/quotes. For instance if you quote on a project basis rather than by the hour then increasing your hourly rate will be more hidden to the client than if they usually see your hourly rate in a proposal.
So how often do you lose business based on price? Is it time to put your prices up? Remember the only barriers that exist to moving your business forward are the ones you put there yourself.