I recently asked on Facebook if anyone had any blog topic requests.
One person suggested writing a blog post on how to raise prices without losing current clients. I thought that could be pretty helpful for lots of people, so here we go. :)
First of all, I know this post doesn’t apply to everyone. Not all of you have services.
But if you’re wanting to earn money online, and you haven’t yet… I strongly recommend starting by offering some services. They’re the fastest way to earn money and they’ll help you bring in revenue as you work on your longer-term income goals.
Some services you can offer:
- Article writing
- Graphic design
- SEO services
- Virtual assistance
- Offline marketing (working with small business owners)
Normally, I recommend starting your prices low. That helps you get feedback, work on your craft, and get testimonials.
For example, when I started copywriting my introductory rate was $1,000 for a letter. Now it’s at least $5k, plus royalties.
After you “pay your dues”, you can move upwards.
Here’s an overall step-by-step strategy on how to raise your rates:
Step 1: Start with the end in mind.
First figure out the monthly amount of money you’d like to be earning and how much time you’re willing to put in for it.
For example, maybe you’re OK continuing to make $3k a month but want to put in less hours every month.
Maybe you want to earn $1k extra a month and don’t want to change the amount of time you’re working.
Figure that out FIRST.
This way you’re not lusting for some arbitrary number – you’re determining your target hourly (or project) rate.
You’ll have solid reasoning for what you want to earn and you’ll be able to feel more confident asking for it.
Step 2: Document why your services are worth more than what people are paying.
Start putting together testimonials, results, case studies, before/after pictures, whatever… so that clients (and your confidence) have a reference point as to why you should be paid more.
(We’ll go over this more in a little bit.)
Step 3: Think of perks you can add on to your existing services.
If you’re going to ask people for more money when they’ve been paying less, they’re going to feel a sense of loss. You can’t blame them for that – you would too.
Is there something you can do that will make your client feel like when you raise your rates, they’re gaining something too?
To get you thinking about this, think about related things that your clients need when they purchase from you.
Here are a few examples:
If you’re a designer, your clients will likely need content to show off on their site. Or a Facebook page design that’s congruent with their new look.
If you’re a virtual assistant, there are probably tons of tasks your clients would love to outsource to you but don’t think they can yet. Maybe it’s making phone calls for them, or writing blog posts, or… look at this page for inspiration.
Someone who does eyelash extensions once asked me about this. My examples to her of perks she could offer would be perhaps a complimentary hair blowout, or eyeliner that works with the eyelashes, or a more flexible schedule (where people can come in without having to book so far in advance).
One thing most any client would love, for nearly any service, would to be able to have their service providers “on call” during certain hours, so they don’t have to wait around.
You could also ask your client, “What could I do to make your life easier?”
Many of these perks cost money. The idea is for you to work these perks into your pricing so you end up still hitting your target rate while inflating the value to your client.
(This is another reason why it’s important to know your target rate.)
Step 4: Identify your client’s ROI of working with you.
This return on investment might be monetary, like someone making $20k from a sales letter you wrote them.
It might be convenience. Maybe you saved them “x” hours.
Or perhaps it’s the convenience of having worked with that person for a while, so now you know their preferences.
Maybe the ROI is they feel more beautiful when they work with you, or your techniques help their long-term well being whereas other peoples’ don’t.
When you dug up your documentation in #2 you should have gotten a lot of ideas.
Step 5: Think of taking precautionary measures.
After you do all this, your next step is to ask.
There’s major magic that comes from acting a little outside of your comfort zone.
But if you want a backup plan, here are a couple thoughts:
a) If you can take on new clients, take them on at your higher rate. This will give you a stable of clients, plus you’ll be able to to truthfully tell your clients you’re worth “X” and people are paying it.
(Note: If you do this, make sure you change everywhere you’ve posted your rates before.)
b) If you can’t take on new clients, start a waiting list. If for some reason your clients say “no” later on, you’ll have people you can go back to.
c) If you can save up some money before you go for the big ask, all the better. That’s not necessary but it’s amazing for your peace of mind.
I think it was John Carlton who mentioned always having 6 months worth of living expenses in the bank. It’s a great rule of thumb to live by.
Step 6: Ask.
At this point, you’ve done a lot of homework. You know your target rate. You know why people should work with you and the value you bring to them. You know how you can add even more value to your services so that you’re approaching things from a win/win perspective, not just a win on your end.
By the time you’ve done all this, you should feel very confident your services are worth the price increase.
So ask. Say something like:
“I’d like to discuss our working together. I’ve loved working with you so far, and judging by your feedback, I’m pretty sure you have too:
Mention feedback here. [“You’ve told me I was the best writer you ever hired.” “You made $30k from my sales letter.” “You said I’ve done the best job anyone else ever has.” “You’ve lost 20 pounds.” “You said I got your voice.” “I saved you 10 hours.”]
Since we started together, I’ve been restructuring my business so it’s even better for you. Based on [what you/what other clients I work with] have said, I decided to add “x” services into my package. This helps you save [time/money/whatever], plus makes it easier for you overall.
I am also changing around my pricing structure. My rates are going from “x” to “x” effective “x”, and I am becoming much more selective about the types of people I work with.
I chose this rate very carefully, making sure your ROI was still high:
Mention ROI here. [You make $20k each time I write you a letter. You get “x” hours saved with every “x” you pay me . You’ve told me you feel more confident than you have in years, which is priceless.]
…and then of course, you’ll also have the added “X” benefit. [Mention what you came up with in paragraph 3.]
Like I said, I’ve thought this out carefully to make sure you have a positive return on investment from working with me. And if for some reason this doesn’t work for you, I’ll be happy to refer you to someone who might be a better fit.
And as a side note, I’ve been thinking about your business, and I also think I can help with… [mention something here].
If you have any questions, let me know. I’m looking forward to an even brighter relationship together. :)
Step 7: Be okay if they say no.
If you state an email well enough, from your client’s perspective, many people will understand.
Others might not.
Some people only care about the bottom line.
(They’re usually not as fun to work with.)
There are a couple things you can do:
a) You can ask your client flat-out, “What would make it worth it for you to pay me “x”? (At this point you have nothing to lose.)
b) If you really need the cash, you can do a close-out special and offer prepaid blocks of time to your current clients as you hustle to find new clients.
c) Be prepared to stick to your desires – even when it’s tough.
If you’ve already done the prep work and you know your services are worth charging more, then hold to that. Know your worth.
You’ve found clients once. You can find them again.
I’ve found that whenever I’ve held to my desires the universe has supplied me with everything I needed to fulfill them.
(When I wavered, not so much.)
That doesn’t mean just stay put. You’d still take action towards finding new clients: updating your website, asking for referrals, posting job ads…
But faith and self-assuredness go a long way too. :)