This is a guest blog by Mark Vaesen from Tomango.
I’ll always remember the first time I decided to put my prices up. It was one of the most nerve-wracking days of my business life.
This would have been around 2001, I was in my early twenties, and I’d only been working for myself for a year or so.
I’d managed to build up a bit of a decent base of clients, and I’d got to the point where I was incredibly busy but wasn’t earning as much as I would have liked. Things were still a struggle.
I KNEW what the problem was, I wasn’t charging enough, but like loads of other people who are just starting, I was grabbing any business I could, and the thought of losing a client (which I was sure was what would happen) was making me almost poo my pants.
But it had got to a point where I almost literally couldn’t carry on unless I dealt with my pricing. I was running at full tilt but not making enough money. And I’d been putting it off for so long; it was becoming more and more of a problem.
The big moment
So – I’m in a meeting with one of my biggest clients (looking back at it now, they weren’t that big at all, but at the time it seemed massive) and we’re talking about renewing their contract.
I’d been getting myself worked up into a state all morning. My stomach was churning, my heart was racing, and my palms were distinctly clammy. I knew the moment was approaching where I just HAD to say something. If I didn’t, I knew I’d hate myself for being a complete wimp.
They were going to react horribly, I knew it. The client was going to pull a face, say something nasty, and probably kick me out of their office for being so greedy.
So, I opened my mouth, and in a slightly squeaky voice and said, “I need to increase my prices, I’m afraid. By an extra £5 an hour.”
There was a brief pause.
“That’s fine,” my client said, “I’m surprised you haven’t mentioned it before.”
Damn it. I felt really stupid. Pleased, obviously, but stupid.
What Mark learnt about how to put up his prices
In the car on the way back, I vowed never again to be worried about putting my prices up. What was the worst that could happen? Ok, I might lose a client who couldn’t afford me anymore. But the extra income I’d get from everyone else paying that little bit more would easily cover anyone I lost.
Over the years I’ve put our prices up several times, making sure I did it regularly, having learnt the lesson of leaving it too long.
Yes, we lost some clients. But if they couldn’t afford to pay our prices (or, more to the point, didn’t think we were worth more), did we want to keep them anyway?
Where Mark is now
Now I’m comfortable with where we are with our pricing. I know we’re not the cheapest, but I know we give excellent value.
And as someone smart once said, there’s a big difference between price and value.
What Mark suggests you do next
Julia’s book will help you get over yourself, and understand the right price to charge (here’s a spoiler alert: it’s probably more than you are at the moment).
As well as all the theory, there are some great practical tips for how to implement increases to make it easier on you than it was for me all those years ago.
It’s not just about pricing
Finally, there’s one other significant thing you can do to help with your pricing; look at your branding.
Having a strong brand identity helps position you in your marketplace, so if you want to charge premium prices, having the right brand makes all the difference.
You can read more about how important your brand identity is (no matter what size your business is) on the Tomango blog.
And if you’ve taken a look at your brand and decided it’s not working for you, get in touch, and we can have a chat about it.
A note from Julia
This article is taken from one of Mark Vaesen’s emails to his customers. I receive Mark’s great emails about branding and online marketing regularly and got a bit of a shock when I saw that he was suggesting that people read my book.
I then asked Mark if he would be happy for this to be a blog on my site, and he kindly agreed. If you’d like to take Mark’s advice and get a copy of the Sweetspot Pricing book, you can buy a copy here.