How to Increase Your Prices With Confidence

Want to know how to increase your prices with confidence? As a business owner, you should be reviewing your pricing, at least, once a year. And sometimes when you do that review it will become evident that you need to raise your prices. But just because you know you should do it, doesn’t mean you’ll feel confident about it. I talk to coaches, consultants and service-based business owners all the time who know they should raise their prices but are scared to do so. Keep on reading to find out how to increase your prices with confidence.

 

 

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HOW TO INCREASE YOUR PRICES WITH CONFIDENCE

 

Focus on the value your service is providing

It is easy to undercharge for services, especially if you are providing the service and it is something that you find ‘easy’. But when you are pricing your services you shouldn’t be thinking about how long it takes you to do or how easy/difficult it is for you. Pricing should always be based on the value your service is providing to the client.

Get clear on the value your service is providing and the difference your service makes to your client. If you’ve been running your service for a while take a look back through your testimonials to remind yourself of the impact it has made. Keep this information to hand so that if you ever have a moment where you doubt increasing your prices you can remind yourself exactly why that new price is acceptable.

 

 

Know your numbers 

To increase your prices with confidence you need to know your numbers. Your pricing shouldn’t be a number that you’ve pulled out of thin air but a figure you have reached based on considering a number of different things. Your pricing should be based on the value your are providing as mentioned before. But it should ensure you can achieve your financial goals. I share more about how to price your coaching packages in order to achieve your financial goals here. But as an absolute minimum you should run the number and be confidence that your pricing will enable you to achieve your financial goals.

 

Increase your pricing in increments

If you are really nervous about increasing your price here is something I’ve recommended to clients in the past. Rather than instantly putting your prices up take a staggered approach based on your sales.

For example, you could be a money coach with a 3-month coaching package that currently costs £1,500 and you know that you need to increase your prices – in fact, you need to double your prices to £3,000. Rather than doing it in one go you could tell yourself you’ll increase your pricing by £500 every time two people buy the package. So after 2 sales, it would increase to £2,000. After 2 more sales it would increase to £2,500. And after 2 more sales it would increase to £3,000.

Taking this route does mean you’ll lose some revenue. If you were to sell the 6 packages at £3,000 that would generate £18,000 in revenue. By doing the price increases on an incremental basis you’d have sold 2 packages at £1,500, 2 at £2,000 and 2 at £2,500. This would give you a total revenue of £12,000. That is a £6,000 difference. So this route isn’t something to take without properly considering. However, it is a great option if you are resistant to increasing your prices and want to increase your prices with confidence.

This is a technique I often recommend when people are selling face-to-face or via an online call. It’s horrible when you are doing a sales pitch and know that soon you’ve got to say the price and you are nervous about it. This technique specifically helps in this situation. You are only increasing the prices as you make sales. You can be confident that you had X happy clients at the previous rate and therefore you can still have a happy client even if you are charging slightly more this time.

 

GET YOUR 2024 STRATEGY CREATED IN ONE DAY! Pricing is just one of the things you need to consider ahead of a new year. Since 2019 I’ve been running Strategy Days with small business owners to help them set their goals for year ahead, define their strategy and then map out the actions they’ll need to take. I know time is tight when you are a business owner so I’ve refined the process to take just one day. One day together and you’ll end up for a plan for the whole year! For more information and to book click here.

 

Remember it is easy to reject an offer based on price

A major reason why business owners fear increasing their price is getting more rejection. They have already had potential clients say that the service is too expensive at the current rate and so they can’t possible believe that someone would be willing to pay more.

It is easy to reject an offer based on price. In many cases it feels easier to say ‘I can’t afford it’ than it does to share the real reason why you don’t want to buy something.

Keeping this in mind as a business owner is vital. No matter how many times your services have been rejected in the past and the potential client said it was based on price, the reality is only a small percentage of the time will it actually have been about the price. So don’t let that stop you from increasing your prices.

 

Give your current clients plenty of notice

Increasing your prices for new clients is one thing but increasing your prices for existing clients can feel very different. I’ve worked with business owners in the past that have been super confident about increasing their prices for new clients, but as soon as the conversation moved to what they’d do about their existing clients they became nervous about changing.

When you increase your pricing you have two choices. You can grandfather your existing clients, which means they’ll retain the price they already have. This is a commonly used in memberships. For example, someone might have a Founder rate for people who join in the beginning and as long as they stay in the membership they’ll retain that rate.

If you grandfather existing clients and customers then you should consider the financial implications. In the same way that taking a staggered approach to pricing in the example earlier meant the business could lose out on £6,000, if you decide to grandfather that will have an impact on your potential revenue.

This is especially important if you have a limited number of clients on a retainer basis. This is a common way for social media managers, VAs and freelance marketers to work. If you decide to grandfather all your clients, but then you only have a few spaces for new clients then it will have a significant impact on your potential revenue.

If you decide you don’t want to grandfather your existing clients and that everyone will need to pay the new price – give your clients as much notice as possible. People are used to prices go up. For example, every year when you renew your insurance you know it will go up. But the more time you give people the better.

And yes, you might lose a few clients. Be prepared for that. However, in my experience, the number that has left has always been less than the business owner expected.

 

GET YOUR 2024 STRATEGY CREATED IN ONE DAY! When making decisions, such as grandfathering, you really need to look at the impact to you business beyond the immediate month or quarter. That’s why planning for the upcoming 12 months is so powerful. Since 2019 I’ve been running Strategy Days with small business owners to help them set their goals for year ahead, define their strategy and then map out the actions they’ll need to take. I know time is tight when you are a business owner so I’ve refined the process to take just one day. One day together and you’ll end up for a plan for the whole year! For more information and to book click here.

 

Get comfortable being less accessible 

I’ve lost count of the number of times a business owner has told me they don’t want to increase their prices because they want to be ‘accessible’. I share more about how you can make services more financially accessible here.

 

But the fact is if your business closes it won’t be able to help anyone. There is no doubt that by increasing your prices there will be some potential clients who can no longer afford to work with you. But that isn’t a reason to keep your prices low. You can look at other ways to help people in an accessible way. For example, you might decide to do work pro-bono, to offer scholarships or create a different service/product with a lower price point.

 

There are options for you to be able to help those who aren’t able to buy at your raised price, but please don’t not increase your price in an effort to stay accessible. No matter what you charge you’ll always be inaccessible to some people.

 

Ensure your branding, positioning and pricing are aligned

If you have a budget brand and increase your prices you are going to struggle. If you want to increase your prices with confidence then you need to ensure that your branding, positioning and pricing are all aligned. For premium pricing to be successful, you need a premium brand too.

 

If you decide to increase your prices you’ll need to also review your branding and positioning. Ensure that they all work together well and that the messaging and client experience is consistent.

 

Find examples of other businesses charging more

This is a bit unorthodox so I’ve saved this for last. But if you want to increase your prices with confidence find an example of another business that is offering the same service and charging a lot more! Too often when you increase your prices you are thinking about the new price in relation to the old price and therefore it can feel expensive. By finding an example of a similar service being priced considerably higher all of a sudden your service, even with the price increase, will feel considerably cheaper.

 

That’s it. You now know how to increase your prices with confidence.

 

Increasing your pricing is part of business. If you look at everything else you buy you can see how the price you’ve been charged has gone up over the years. Your business is no different. You should be increasing your prices over time and hopefully reading this blog post will help you to increase your prices with confidence.

 

Let me know in the comments what your biggest takeaway is.

 

Book a 2024 Strategy Day and ensure you have the right services, pricing and marketing to smash your 2024 business goals.  Setting your business goals is just the beginning. Once you are clear on WHAT you want to achieve you need to work out HOW to achieve them. Over the last 5 years I’ve developed a process to allow small business owners to put together their business and marketing strategy together in just one day. So if right now you don’t have a strategy in place for 2024 and you’d like to be guided through reviewing 2023, setting your goals for 2024 and then having the right business growth and marketing strategy in place to get there – book a 2024 Strategy Day. For more information and to book a 2024 Strategy Day click here.