Ever wonder if your prices are right? Most people I meet wish they could charge more, but they aren’t sure if it’s a smart move. A graphic designer client summed it up: “I can’t afford the risk; I’m worried I’d lose a lot of business, and I need the money!”
Yes it’s a risk, but one that I have seen pay off time and again with my clients (including the graphic designer!). Here’s five reasons to take the leap and raise your prices.
You’re Undercharging Now
Nearly every business I meet is undercharging for their services. There are a variety of reasons for this. To name a few: lack of information about competitors’ prices, deep-seated insecurity about our self-worth (myself included), and “if it ain’t broke, don’t fix it” pricing inertia. So yes, it’s time to raise your rates.
Work Less for the Same Money
The #1 fear stopping people from raising their prices is that you will lose business. I always tell my clients to remember that, if you raise your prices, you can afford to lose some business. Because each project pays you more, you can earn the same amount of money while working less.
For example, I recently helped a coach raise his rates. While some clients could no longer afford him, his revenue still went up 30% in the following year. (And his stress levels plummeted!)
We all know that you only get to keep part of every dollar you make, after expenses and overhead. But did you know that you keep 100% of every dollar you raise your prices? If a $100 sale costs you $45 in expenses, selling the same thing for $101 still only costs $45. That extra dollar is pure profit, straight into your pocket.
Work with Better Clients
A lawyer I work with recently raised the rates for his firm. One of the best results was that the quality of his clients started to increase. “It’s like magic,” he told me, “the clients that approach us tend to have deeper pockets and complain less about budget.” I see this result consistently.
Clients are More Committed
Not only do you tend to attract clients willing to spend more, you will probably also find that clients tend to be more committed. When they step up to invest at a higher level, they have more skin in the game. As a result, you will experience fewer headaches around unresponsiveness and lost momentum.
Ready to make more money? To make it easy to figure out your new prices, download this cheat sheet I made.
Here’s how to pick your new prices
I made you a 1-page worksheet with the 10 factors to set the best new prices.
Share Your Thoughts
Do you have a funny story about raising prices? Or advice for our community? Share your thoughts below!