It is common knowledge that most professionals undercharge for the great service they provide. They have little confidence in the value they provide their clients, so are reluctant to charge more.
Others incorrectly assume that their clients cannot afford to pay more, never increasing prices due to fear of losing clients.
However, charging the lowest price in your industry could do your reputation more harm than good and could potentially damage your credibility. A price that is significantly below market value sends out a message that is not always a good one.
Increasing your prices periodically is a great strategy for growing any business. A 1 per cent increase in price is a 1 per cent increase to your bottom-line.
In addition to the increased profits, increasing your price delivers other benefits:
- It differentiates you from the myriad businesses out there fighting for the same mediocre price points.
- It also forces you to develop and push yourself so that you are able to deliver value that matches or even exceeds the higher price you are asking for.
- Higher pricing also flushes out dead weight clients so that you have more time and energy to focus on your best clients, delivering even better value.
- I’m not advocating that you hike your prices overnight but a justifiable and well-planed increase will go a long way to helping you achieve your growth targets.
So how can you actually implement a price increase strategy?
1. Believe that you are worth it
This is the first and biggest hurdle you have to jump in order to be able to charge what you are truly worth – not what your creatively deceptive mind is telling you you are worth! The way to do this is to practice saying your prices to yourself and your close friends so that you start feeling comfortable saying it out loud. It will initially be uncomfortable but isn’t growth and development all about stepping out of your comfort zone?
2. Its really not about you, its about your clients
Its time to stop thinking of the service you provide as a cost. You have to think about the results and benefits you give your clients. Your clients are investing in their lives and their business when they work with you. It’s not really about you. Thinking like this takes the focus from you and places it firmly on your clients, where it should be. Remember, your clients are not simply buying your time. They are accessing expertise you spent a lot of money, effort and time developing. They are investing in a service whose impact often times far exceeds any price they pay you.
3. Put a plan in place
Make it easy for yourself by taking the guesswork out of implementing price increases. For every 5 new clients why not increase your price by as little as 3% for the next 5? It makes your pricing reflect and factor in your growing repute and also applies some kind of logic to the way you increase prices.