Raising Your Prices Without Losing Clients

June 30, 2014 Kathy Watts permalink

revenue_growthIt’s inevitable we all need to raise our prices sometimes. But raising your prices can be scary. There is always the fear that you’ll face uncomfortable push back from clients. Or even worse, drive them into the arms of your competitors. Here are a few strategies that can help make raising prices a comfortable and regular part of your business.

Have a pricing plan in place.
A pricing plan helps you track and calculate prices for your services and products. If you don’t know the cost of doing business and how that changes in your business over time as market prices and demands change, then you won’t know what is the right price for you to charge and when it is time to raise your prices. Having a plan that you evaluate regularly makes price increases part of your normal business practice and something your clients will come to expect. It’s also smart business.
A pricing plan can help show you when it is time to raise your prices, such as:

  • Your competitor has raised their prices
  • You have incurred an increase in costs

It can also help you choose the right time of year to raise your prices. Most retail businesses raise their prices in October, in advance of the holiday season. But, as you look at your pricing plan, you might find that there are certain times of the year that will emerge as a good time for you to do a price increase.

Knowing the right time to raise your prices and understanding why they need to be higher can make it much easier to explain to your clients why your prices have gone up.

Consider changing your pricing structure or the way you package your services.
Rather than a flat out rate increase, you could find that changing the way your services are structured or creating bundled or add on packages could give you the rate increases you need while still remaining attractive to clients. Try tiering prices into low/middle/high offerings, such as haircut; shampoo and haircut; or shampoo, haircut, & blow dry. Or bundle your offerings into premium packages, made up of one of your signature offerings bundled with a mini add-on treatment. These sorts of changes can lead to price increases that come across as more value added in the eyes of the client.

Be honest, not apologetic, with your clients about the price increase.
Tell them you are raising your prices. Be up front and honest with them. Highlight any increased value you are offering as well as any investments you have made in your business or your staff. Even a simple, “We’ve increased our prices so we can continue to provide you with the great service you expect from us.” is a good way to handle the announcement. But don’t shy away from telling them about it and don’t apologize. This is a business and part of running a business is that sometimes you need to raise your prices. Being up front with your clients about it will make them feel better about the increase.

Raising prices is a part of doing business and it is a key way to keep your business flourishing and help it grow. By making sure you understand the underlying reasons driving your price increase and feeling comfortable talking with your clients about it, you’ll make the price increases easier for everyone involved. You’ll protect your bottom line and your clients’ satisfaction.

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