How to raise prices (without alienating clients).
The cost of EVERYTHING is climbing & the thought of raising prices makes everyone nervous. Costs have gone up & value of what we provide has increased, but we struggle to charge what we're worth. So, how do you raise prices in a way that doesn't alienate customers?
1. What are your actual costs? This includes materials, time for production / delivery, but should also aggregate in your overall costs for keeping the doors open & the lights on. Then you can start to determine what your price per hour or project should be. If your costs are increasing short term, you might opt for a temporary increase.
2. Your business has its own "seasons" or cycles that should inform your timing. Maybe when you launch a new product line, pricing increases. Or perhaps you re-assess pricing at the start of each financial year (which may not be in line with the calendar year). Or maybe you start mid-year with increased pricing for new customers & bring older customers on board later in the year in a more gradual fashion. You can also increase prices for most of your clients in a blanket fashion & offer a stepped increase for your best or biggest clients.
3. Nobody will be happy to see a a bigger bill, so prime your customers as much as possible. For bigger increases, send an email out 60 days in advance with the new pricing. If you are able, start pricing new clients at the new rate as early as possible--even months ahead. I would also remind customers of the increase a few weeks before their new invoice or autopay charge goes into effect.
More importantly, make sure you indicate why the prices are going up. Are you offering more service? Have your costs increased? How has your business grown & changed since they came on board?
And finally, make sure your customers know how much you appreciate them & their business & be open to their feedback or even complaints. Your customers work with you because you meet an important need. If you continue to deliver quality service, they will probably not even think twice about paying the increased prices. They knew you were worth it before you did!
