Five Steps to Raising Prices For Your Clients
The other day, one of my clients came to me wanting to raise her prices. She’d been coaching for about five years, and she had 15 clients – but five of them were “grandfathered in” to prices that were way lower than her current prices.
She’d been working with these clients for years, and she really liked them. But she’d gotten to a point where, if she didn’t raise her prices for those clients, she wouldn’t be able to hit her goals.
I talk through this dilemma with entrepreneurs all the time. If you have clients – no matter what business you’re in – the experience of needing to raise your prices is pretty much a given.
It often occurs in conjunction with the need to make more money to cover your expenses, the desire to generate more revenue, and/or the knowledge that you’re now better trained than you were before. So you feel like it’s time to raise your prices – but you’re scared, because you don’t know how to.
This week, I want to walk you through my five-step process for dealing with these scenarios and raising your prices.
Step number one: pick a date to raise your prices. I would pick a date either 30 or 60 days out from where you are – and that will be the date when you officially raise your prices.
Step number two: decide what you’re going to charge the people who aren’t paying your new prices. Are you going to bring everybody up to your new normal prices, or are you going to increase their prices but keep them 10, 20, or 30% lower than your normal price?
I would suggest that you take everybody up to your new prices in one fell swoop – but some people decide that they just can’t do that because they’re worried about upsetting (or losing) their clients. If you’re going to go ahead and give those clients savings off of your normal prices, just make sure you’re very clear about what the discount is and keep it consistent across the board.
If your payment policies and rules have shifted – let’s say you used to let people pay session by session, but now you’re requiring them to join some sort of continuity program – you also want to decide which rules will apply to these clients who have been with you for a while.
Step number three: write a letter that announces your new prices, your new rules, and the date when they’ll go into effect, then send the letter through snail mail and email to all of your clients.
In that letter, you’ll also want to give them the reasons why you’re raising your prices – you can tell them your expenses are increasing, your value has increased with training and experience, your business is growing, and so on.
Of course, if a client is in the middle of a contract for a three- or six-month program, for instance, you wouldn’t send them the letter or change the prices in the middle of their program. You would wait until their contract was up and then have a conversation with them.
Step number four: once you’ve sent the letter out, call all of your clients and ask if they’ve received it. Alternatively, you could set yourself up by putting a line in the letter that says something like, “If you’re in agreement with this, go ahead and shoot me an email to let me know. And if you’re not in agreement with this, let’s set up a phone call to chat.”
Now, you might be wondering why I’m telling you to give your clients a snail mail letter, an email, and a phone call. It’s simply a way to give everybody the respect of talking to them before the date you’ve chosen for raising your prices.
Step number five: think through the emotional aspects of this process. Raising your prices can be terrifying because you’re afraid to hurt people’s feelings, seem conceited, or lose a bunch of your clients.
And I won’t lie – you may lose some of your clients. But what I’ve found in all my experience is that this fear of what’s going to happen is much worse than the actual outcome.
At this point, I’ve probably helped clients do this a hundred times – and my clients are pleasantly surprised. Most people are fine with the raising of prices. And if you have to let some people go, that sadness is bearable because of all the people who react well.
I will also say that if you do end up letting go of quite a few people – being OK with that sadness and trusting that new people will come in is a huge piece to being able to do this. If raising your prices creates a lot of open space, trust that your marketing and sales operations will bring new people in to fill that space.
So this week – if you’ve been thinking of raising prices for your clients, or if you’re now realizing that you want or need to – I invite you to get started with these five steps.
To recap – number one: choose a date; number two: set rules for your new prices; number three: send a letter and an email; number four: call folks; number five: be emotionally prepared for both the good and the bad that may happen.
Here’s to doing the hard things – and learning to trust the outcomes!
