No matter who you are or what you sell, there will come a time when raising your rates is the most obvious thing to do. Your pricing can’t stay stagnant forever. Think about it, how often do prices change on other things you buy all the time. Bread, gasoline, energy rates, you name it. Everything increases in price at some point. This is often called inflation and is a given in today’s market.
Before you can begin looking at raising your prices, you need to feel comfortable with the action. I know it can make you feel very uncomfortable to raise your prices. You think about things like, what will my customers think? What if they leave me? And these are very relevant questions. Needless to say, raising your rates is as natural as breathing. It’s all in how you raise them. You could make a giant leap from $1,500 to $5,000 or you could go more gradually $1,500 to $3,500 to $5,000. It’s all up to you and what you feel will suit the needs of your clientele and your business.
Let’s start by looking at some signs that tell us it’s time to raise your rates. Then we’ll look at the best ways to raise your rates.
You’ve upgraded your skills
If you’ve upgraded your skills and you know how to do things that are far above the level you were previously at, it is definitely time to increase your rates. The more you know how to do, the better your skills, the more your skills are worth. You should always be working toward increasing your skillset and as you do so, your rates should reflect your new found, newly upgraded skillset.
You have resentment for your clients
When you are working with clients and you begin to feel that itch of resentment every time they contact you, it may be time to increase your rates. That feeling of resentment is rooted in the belief that they are getting something for nothing. That’s probably because they are getting something for nothing. That feeling of resentment will only go away when you begin to feel like you’re being paid fairly for the work you’re doing.
Expenses or cost of living are going up
Everything increases. That’s a given in life. The cost of living is always going to up and so should your rates. As life gets more expensive to live, you will find it necessary to increase your rates. This shouldn’t make you feel bad, it’s a common occurrence that happens with every product and service over time.
Demand is high
As demand for your services increase, so should your rates. Higher demand for your services makes them a commodity and commodities is worth more. When you reach the point where the demand is high for your services and you’re turning clients down, its time to increase your rates.
Now that we’ve identified when to increase rates, let’s look at how to increase rates. First, don’t apologize for the increase, but do be ready to explain why you are increasing rates. You don’t need to go into extreme detail, but you can give the basics of why you’re raising your rates and explain the benefits clients will see with the new pricing. Whatever you do, don’t be sneaky about it. Be honest with your clients, let them know what’s going on. It’s important that you have a plan. Plan out how you will increase your rates and make that plan known to your clients.
Raise rates in intervals. Don’t feel that you must make all your changes at one time. It’s a great idea to only increase rates for new clients and allow existing clients to be grandfathered into current pricing. The key to increasing rates is to increase value as well. The more value you provide your clients, the less a rate hike will matter to them. Be sure you are continuously adding more and more value every chance you get.
So that’s it, that’s how you know when to increase rates. Remember it’s important that you keep an eye on the competition. You don’t want to be the most expensive, but you also don’t want to be the cheapest. Focus on being the company that has the highest value for clients and let your rates fall somewhere in the middle. That’s all for this week. Remember to follow me on Instagram, join my private Facebook group and subscribe to my YouTube Channel, all the details are in the show notes. I hope you enjoyed this episode, if you did, please rate and review. This is how my show gets heard by others, so it’s super important. Thanks again for listening and I’ll chat with you again next week.
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