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How to Raise Your Prices – And Keep Customers!

People tend to think that they need A LOT more business to make a decent living.

Well…the 80/20 rule paints a different picture.

“Eighty percent of business comes from twenty percent of your customers.”

This means that many businesses aren’t charging their current clients enough money.

The solution is simple. Raise your fees – without losing customers. Are you rolling your eyes? Ok, I’ll show you how to do this.

1. Set the Right Fees

You begin the process of increasing your fees by setting realistic prices.

I know. It’s easy to say. But it can be hard to do.

Price setting is nerve wracking.

I’ve watched many hard-core business owners crack a sweat trying figure out what to charge.

The secret is to take the emotion out of the equation. You’ll be more objective if you use a formula.

Here’s a very basic example. Your skills + experience + current market rates = your fees.

In my book, OutSell Yourself, you’ll find a more in-depth method to identify the price range for your products and services. I also share my personal method to ethically find out what your competition charges.

2. Phase in Fee Increases

Raising prices, without warning, won’t leave anyone with that warm fuzzy feeling.

You need to give your current customers time to adjust to the new you.

3. Let Customers Peak Inside Your Head

Other than you, not too many people will jump with joy about a price increase.

When someone knows why fees are going up they tend be more understanding. This is especially true when your customer knows how they’ll benefit from the situation.

Reasons for price increases can include the following:

a) “Fees are going up because; we’re using new technology (upgrading our skills, hiring additional experts…) which will __________ (put the benefit to the client).”

b) “Fees are going up because; our operating costs have increased over the past few years. We’ve done our best to absorb the additional expenses. Moving forward, to serve you as we’ve done in the past, we need to increase our fees by X%.”

4. Reward Loyal Clients

You can soften the blow of a price increase by rewarding current clients for their business.

“Because we value your business we will continue to honor the current fees for thirty (sixty or ninety) days.”

*For new clients the increased fees can be retroactive.

5. Spread the Word

When communicating any type of change it’s important to create a strategy.

Let’s say you have ten active clients.

If we apply the 80/20 rule then approximately two customers would be your top accounts. Those are the folks that you should contact personally.

Smaller or less active accounts can be informed of changes via email or regular mail. Just remember to pass on the phased in price increase to them too.

6. SURPRISE You Could Get More Business!

Once the word is out, don’t be surprised if it results in immediate business.

By following this plan, you will have created a time sensitive reason to Buy Now!

Hi, I’m Kelly McCormick, a Business Growth and Marketing Strategist. I help entrepreneurs & companies to identify opportunities for growth. Plus, I develop targeted branding, marketing & sales strategies. I can help you too!

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