Tackling the Fear of Raising your Prices
Whether you own a coffee shop or your sell online courses, at some point you may want or need to raise your prices. It’s a challenge most business owners will face at some point. Yet so many of us are keeping our rates the same year-over-year.
So, why do we avoid raising our prices?
I believe it has a lot to do with our self-worth.
Telling our customers that we want more of their money can be very scary indeed. First off, it forces us to talk about money, and that can make us feel uncomfortable. As a general rule, women don’t enjoy talking about money. Many of us feel that talking about money is rude and something we were taught not to do when we were younger. Many of us feel that we’re not good with numbers and so we don’t look at our numbers as often as we should.
If you fear raising your prices, know that you are not alone.
Why you should be raising your prices
That said, raising your rates is something that all business owners should be doing on a regular basis if for no other reason than the cost of living goes up every year. Inflation is currently at about 2%. Meaning if you are not raising your rates by 2% each year, you are actually making less money in comparison to what your life is costing you.
Raising your rates also tells your clientele that you value what you do and they should too. It’s is taking the ultimate ownership of your business to tell someone that you are excellent at what you do and deserved to be paid well for it!
Raising your prices is also the most effortless way to generate more money in your business. There are a few other ways:
- You can always go get more clients, but that can mean increased marketing costs and energy.
- You can get your clients to buy more things from you, but that can involve upselling (a concept that can be equally uncomfortable) and it also involves having to have more inventory if you are a product-based business, which may require more of your time, energy or storage space.
- You can get your existing clients to come back more often and make a purchase from you more frequently, but again this can often involve advertising dollars.
How to raise your prices
Raising your prices does require some effort. You’ll want to decide on a price increase that is fair but doesn’t deter a larger percentage of your audience. For example, if you raise your rates by 50% overnight, you could lose the client base you have worked so hard to build. It may be wiser to take a more slow and steady approach.
You’ll want to inform all your existing clients that will be affected by said price increase well in advance.
Next, ensure you’ve made the changes anywhere your pricing exists. This might include your emails, your website, and any signage if you have a storefront. Having your price increase reflected consistently across the board is important.
So yes, it takes some work to raise your prices right, but not as much work as it is to constantly have to bring in new clients all the time or sell new stuff.
When was the last time you raised your prices? If you have to think about it, it was probably too long ago! The fact is most business can and should be raising their rates on an annual basis.
It will be scary the first time you do it. When I did it in my own business for the first time, I was petrified. I lost a few clients but I gained a lot of new ones too. I also re-jigged my packages, so although I was charging more, I was also offering more! Slowly but surely I started to attract the type of clients who were a much better fit for my offerings.
A nice side benefit for me was that I started to work with fewer clients, but they were more motivated to work with me. As a coach that meant they were excited to work on their own items in between our sessions, and they were pushing themselves harder, achieving new levels of success. In short, higher rates often equate to a higher caliber client.
It can be tempting to keep your rates low forever and just sell more stuff or put in more hours, but that will not create a sustainable business. It can create overwork, exhaustion and eventually, burn out. A better solution is to raise your rates incrementally so you can grow and scale your business with joy and ease.
In fact, if done right, it can feel pretty darn good to raise your rates. Your clients value you and thus pay the increase. You feel like you are valued and thus have a stronger sense of self-worth, and can, therefore, go out and make more amazing things happen in your business.
Lianne Kim is the founder of Mamas & Co. and lead Business Strategist at Think Big Consulting. She will be speaking on the 4 Ways to Grow your Revenue at our Business Bootcamp on Saturday, April 14. Space is limited, and once tickets are sold out, they’re gone! Learn more and grab yours today here.