In every business owner\’s life, there comes a time when you simply have to raise your rates. Maybe you have been in business for years without a pay increase. Maybe your skills have recently improved through a new training course or certification. Or maybe you just want to attract a higher caliber of clients. Whatever the reason, it pays to have a plan in place before you make your big announcement! So, consider the following questions before raising your rates!
Raising Your Rates
Will You Raise Your Current Clients’ Rates?
First, take a look at your current clients. Will you raise their rates as well? If the answer is no, then you have to consider whether keeping them as a client is worth your time, or if you’ll feel resentful at the amount of (soon to be lower paid) time you are spending with them. Resentment can build up, so be wary of this. It’s better to raise their rates than provide substandard services due to hidden anger.
If the answer is yes, then you have to prepare yourself for potential fallout.
Simply put, there are some clients (you likely know who they are) who will balk at a price hike. They’ll threaten to leave. They may actually leave. So, ask yourself, “Am I prepared for the financial hit I will take if I lose them?”
When will the Increase Go Into Effect?
Next, consider when your rate increase will go into effect. Depending on when/how your clients are paying, this may differ between each client! A client who is on an annual coaching plan might not see an increase for 8 months or more, while a monthly client might be shocked to find his or her rate is going up in a week.
Pro Tip: If you can, give your clients at least 30 days’ notice of the increase, so they can not only budget a higher expense but shop around for someone else if they choose to.
Last Minute Offers
Finally, if you’re a little flexible and want to gain a few new clients, you might think about creating a last-minute offer. Announce that your rates are going up on [whatever date], then offer to let X number of new clients lock in your current pricing if they sign a contract right now.
Sure, you’ll still be working at your old rate, but with a few new clients on the roster, your cash flow will improve!
Final Thoughts
When determining whether or not raising your rates is the right decision, the most important thing to remember about rate increases is this: You have to feel good about the prices you charge. If you think your rates are too low, chances are good that they are. Raising them will not only make you feel better, but it let your current and prospective clients know the value of your services!