Raise Your Prices the Easy Way

June 4th, 2019

Rustic Staircase Demonstrating price risesIt’s a tough place to be when you know you’re under-charging and at the same time struggling to put your prices up? 

You probably feel as though you’re stuck in a downward spiral that you just can’t get out of.

We can help.

The annual price rise is a fearful place for many business owners. They’re so afraid that they may lose a client,that they delay price rises for a month or 2, which becomes 3 or 4 and then before they know it, a year has passed.

They tell themselves that they really must put prices up this year but by now they need a 5%, 10% or even 15% price increase to get back to profit.

Now, that will really scare away clients and customers.

We know that different industries have different levels of competition that make price increases even harder but if you can’t make a profit what is the point of running a business?

One client had fallen into this trap; worried about existing customers walking away if prices were raised but at the same time needing to attract new customers.

The plan we devised and executed with our client was to increase the hourly rate from £18 to target rate of £32 – a 75% rise.

Every time our client had an opportunity to quote for a new client they increased the fee by £2. So the first new client paid £20, the second £22 and the third £24 and so on. Occasionally the rise was £1 or the rate stayed the same as the last client. Either way they were earning more that £18ph. They didn’t win every new client they quoted for but the ones they did win they made more money on.

At the same time. They starting working through the existing client list. Those clients that were awkward, too demanding, late paying and so un-profitable had their fees increased to £27ph with immediate effect. They either paid and our client earned a fairer income or they left. Both outcomes were a good result.

The best clients were individually reviewed and conversations were held to move the price up. They didn’t lose one client as they implemented an initial rise and then a quarterly price rise until the client were on the right rate.

The clients in the middle had a letter about a £4ph increase now and then a £1 increase each quarter until they too were moved up the pricing ladder.

As you would expect those clients only interested in price rather than value for money left. This proved useful as the business could then take on new clients at higher fees.

Back to profit with better clients and a brighter future where small price increases happened at regular intervals. Within 6 months our client was quoting £32ph.

If you’re struggling with price rises or not charging enough, let us help you reverse that scenario.

coachSME88

Shirley Mansfield is a highly experienced business coach and Master Problem Solver. With over 25 years’ experience, she founded CoachSME in 2011 to work with business owners to maximise growth, and she is still trying to reduce the 14 handicap! Keep up to date by following me on Twitter @coachsme