Here’s a simple way to increase your prices. I suggested this to a client today, and you might like to do this as well. This client, like many people, had been keeping his prices down during the recent bad times in the economy, offering discounts to make sure that he got the work. He was in survival mode.
As the economy warms up and people realise that it’s okay to invest in their marketing (he’s a marketing consultant), my guy is getting a lot more interest. But he’s still pricing at below the rates he was charging 4 years ago. And he’s scared to put them up. Of course, he is, we’ve had some hard times over the last few years, and we’ve all been keen to keep the work flowing in, and we don’t want to risk losing any business.
I’d like him to immediately put up his rates by around 50%. I know that his competitors are charging even more than this, and I’ve seen the results he gets for clients, which are pretty amazing, so I know that he’s doing some really good stuff which he deserves to get paid for. But I know that he won’t be able to bring himself to charge more, especially for all his existing clients who have been getting bargain prices from him.
So we made a deal
We agreed that he’d try out a new minimum fee on the next 4 proposals he sends out. We set a price and he promised not to go below that price. Even if they asked for a discount. And if he converts 3 out of those 4 proposals, we agreed we’d review the minimum fee and maybe hitch it a little higher, plus, look at putting up the prices of the existing clients.
Because this is an experiment, it’s less scary than just putting up fees just because his business advisor tells him to. We’ll have feedback from potential clients and we’ll be able to see what the response is. My guess is that they will say they’ll ask for a discount, he’ll say, “No, the price has to be X so that I can do a good job for you”, and then they’ll sign up.
Can you try this at home? Can you increase your prices?
Why not try asking for a little more money and see what happens? I’ve tried this approach dozens of times with clients, sometimes several times over until it does start to impact on the sales conversion rate. In fact, it’s only when the price starts to be a factor in sales negotiation that you know that you’re charging the right amount.
Would you like some help setting the right price?
Because I’ve worked with hundreds of businesses over the years, and I know their prices, plus the prices of their clients and suppliers, I’ve got a pretty good idea of what different professions should be charging. Most people are scared to increase their prices, and often need some outside validation to know what they should be charging.
In fact, I’ve got a pretty good idea of what you should be charging. If you’d like to review your pricing, you can book a one-off decision-making session with me to go over your pricing structure, see which pricing strategies could work for you, plus look at what you could be upselling or making into a regular recurring income stream using the recurring income business model.
If you’d also like some help with the other aspects of your business, especially your marketing and business development, so that you have a stream of clients at your door, you probably want some ongoing business advice to help you to grow your business.