Everything You Need To Know About Raising Your Prices
The money convo might be awkward but it's a necessary one.
At some point in every entrepreneur's journey, they're going to need to raise their rates. As you gain more and more expertise, experience, and social proof, your services or product will become more in demand and will justify a higher price.
This is obviously a great way to scale your business, but there are so many questions that come up for us once you actually decide that it might be time.
So, if you've been thinking it might be the time to raise your prices, or you think that time might be coming up in your future, I'm here to answer all the most common questions I hear about this.
The mindset struggle
It's SO common to grapple with your mindset when you're trying to raise rates. You might be thinking:
Who am I to charge that much?
What if no one buys at this price?
Is what I created even valuable?
But I'm here to tell you, value is 100% subjective. If you've done your research, you should feel confident that there are people in your target audience willing to pay your prices and then some. Try not to allow self-sabotaging thoughts prevent you from growing in your business.
I know this can be much easier said than done, but if these thoughts come up for you, try acknowledging that it's just a thought, not your reality.
When do you raise rates?
If you're a service provider, you would want to raise your rates once you're booked out. At that point, your time becomes a commodity that is more in demand. Since you can't increase your supply of time (unless you're ready to hire additional help!), raising your rates becomes one of the easiest ways you can scale your business at that point.
Another way to tell you might be ready to raise your prices is if you're sensing resentment. Your clients are paying you money in exchange for your energy. If that balance is off (i.e. you feel that you're giving more energy than what you're getting back in money), you might start to feel resentment. This is a sign that it's time to either reassess and scale back on the energy you're giving to that client, or raise your rates to match the energy needed.
Should I raise rates for current clients?
Personally I think clients should get the benefits of being "locked" into your earlier, less expensive pricing if possible, in order to provide the best experience possible for them. BUT if you're feeling that resentment I mentioned in the previous point, it's definitely time to reassess. You need to prioritize your own energy over client retention at that point.
How can I retain clients that can't afford my new prices?
You might have some clients that you LOVE, but that won't be able to keep you on their team at the same level of support you provided before. Creating a low-ticket offer in the form of a group container or lower level support can be an awesome way to retain those clients.
This way, when you go to tell that client that your prices are increasing, you're giving them the option to stay on with you and still gain the same incredible value you provide, just in a different way.
How far in advance do I need to tell my clients?
Generally, a lead time of 3-6 months is good, depending on what you do, so they can prepare for the transition or additional expense.
How do I tell my clients about the change?
Have a conversation with them and be super clear about what is changing and what's the same. If you're hoping to keep them as a client, be sure to explain next steps and all of their options for continuing to work with you.
After the conversation, send a follow up email to summarize everything and give them another chance to ask questions.
How do I go about charging my higher rates with new clients?
It's all about brand positioning and being consistent about the value that your brand and business bring to the table. Then, just charge those freaking prices. Say them confidently on sales calls. It's that simple. No need for a press release, and I promise no one will show up with pitchforks.
Still have more questions about raising your rates?
I highly recommend this episode of Through The Marketing Lens podcast, where I go in depth on all of this and give you a great anecdote to illustrate the subjectivity of value!