Salutations friend! In today's topic, we're going to discuss the ways you can do to increase your prices without losing your current clients. If you're currently deciding whether to increase your prices or not, but you have some fears and doubts, then today's episode will help you on "How to Roll Out a Price Increase Without Losing Existing Clients"!
Salutations, friend! Welcome back to another episode of The Profit Scale podcast.
In today's discussion, we're going to talk about increasing your prices without losing your current clients. If you want to scale up your business without fearing to lose your current income stream then this episode is just what you need.
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Here are the topics that we're going to cover in today's episode:
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1. Giving yourself and your clients more time to think about your price increase and letting them notice it.
2. How to communicate the value of your service, and how charging more will allow you to serve them (your clients) better?
3. Learning to let go (some will stay, some will leave, not all your clients are meant to stay with you on their journey)
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It is also important for you to understand the reason behind your price increase. If you're ready to take your business to another level, hit the play button and let's get you started.
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Links:
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Salutations friend and welcome to an episode of The Profit Scale! This is the podcast for service-based coaches, consultants, and creatives looking to stop living from paycheck to paycheck, pay themselves more and scale their business beyond the 6-figure plateau without the overwhelm of 60+ hours work weeks.Â
I’m your host and Income Strategist – RJ Connell. If you are looking to collect more coins, stop dropping coins, and grow your business sustainably, then you, my friend, are in the right place! Turn up the volume and lean in because we are about to get started!
Salutations, friend! It’s RJ here. Today, we are going to talk about increasing your prices without losing your current clients. For the most part, anyway, because you will see some changes in your client base when you increase your pricing and we will get to that soon.
So, friend, before we talk about the effects of raising your prices, let’s first revisit the “why” behind raising it. Do you remember when we talked about the three most common pricing mistakes in Episode 1? Well, one of those mistakes was not having a pricing strategy. It may not seem like a big deal if your business is still bringing in revenue, especially if your revenue is high. However, in Episode 3, we discussed the fact that your business can be revenue rich yet profit poor, so that is why having a pricing strategy matters.
We do not just want to maintain our businesses and pay the rent, then have nothing left at the end of it. We want it to bring in enough revenue so that it can thrive and not just survive.
If you have not yet listened to Episodes 1 & 3, I will link them in the show notes for you. It will give you an understanding of what we are going to delve into in today's episode. As the entrepreneur, leader, and expert, you, yourself, have to be clear on the reason for raising your prices so that you can communicate it to your clients with clarity and confidence.
Usually, entrepreneurs go wrong in increasing their prices when they take an ultimatum approach to it, in other words: “Get on board” or “get to stepping.” It does not have to be that way. It is possible to communicate a price increase in a way where your existing clients are happy to continue working with you. You might even get a few of them to tell you that, “it’s about time.”
So, I’m going to share some tips to help you roll out a price increase while retaining as much of your existing clients as possible. Make sure you are ready to take some notes because these tips could make the difference between your business thriving, or diving once you increase your pricing.
Let’s jump right in!
Tip #1 - Give your clients timeÂ
The best way to get people to adapt to change is to let them know it is coming. This is especially true when it comes to a price increase. No one likes to be caught off guard when it comes to their bank accounts, so here are some strict no’s when it comes to rolling out a price increase.
If you have clients that make automatic payments or pre-authorized debits, do not take an increased amount from their accounts than what was initially agreed on, as a result of your price increase. This is guaranteed to leave a bad taste in your client's mouth and will make them less inclined to continue working with you. Keep in mind that even if it is a seemingly small price increase, your clients could have that money earmarked for another expense on their budget.
Do not send an invoice with an amount higher than what was agreed upon. If you quoted a price lower than what your new pricing will be, honor it. Still communicate and let them know however that your prices have changed and that you will be providing your services at a new price point moving forward. Assure them that since they came in before the price increase, you will be honoring the agreed-upon pricing.
There are some situations when you may only want to honor the old pricing for a limited period before moving your clients to the new one, and that is okay. The main point is that communication is key, and the more advanced that notice you give your clients, the better.
You may be wondering how much time exactly is enough notice — the sooner, the better. As a rule of thumb, you must give a minimum of 30 days. However, if your clients pay several times a month, I recommend you to inform them earlier. It will give them enough time to decide whether they want to continue working with you or not, and it will allow you to have certain conversations with them as necessary.
Tip # 2 - Communicate clearly and often
Do you know the saying, “It’s not what you say, but how you say it?” This statement could not be more true when it comes to pricing. You can communicate it in a way that makes your clients focus on the price tag, or on the payoff — it is all in the “how,” which is why this communication aspect is so important.Â
Now that you have given your clients an adequate amount of notice, we can now dive into what your communications plan should include. The first thing that it should convey is excitement. If you are not thrilled about the new ability of your business to serve at a higher level, why should they be excited? A great way to convey that excitement is to explain the added value that will accompany the price increase. Paint a picture of the added benefits of working with you with the new changes that are coming and what it will mean for your clientele.
You should not talk about the price increase as reflecting your worth or say anything along the lines of “I believe it’s time for me to charge my worth,” or anything remotely close to that statement. When you do that, it shifts the focus off of serving the client and unto you as the business owner.
In those cases, it is easy for it to come across to your clients that the sole reason you are increasing your prices is for your personal gain or benefit, and it does not allow your clientele to feel that you are looking out for their best interest.
The second thing your communication should convey is clarity — clarity in the date that your price increase will take effect and a way for clients to communicate with you if they do not feel they can continue working with you at your new price points. Any and all changes in policies, including refunds, should also be communicated here as part of the changes.
Think about it this way, you want to preemptively answer any potential clarification questions your clients could have so that you are demonstrating that you are thinking of their needs, wants, and concerns.
Lastly, you need to communicate with conviction. It is not enough to believe that your services are worth this new price tag. You have to be convinced that it is truly in the best interest of your clients and more importantly, communicate to them why you believe that to be true.
Combining these three aspects of communication will help you reassure your clients and make it easier for them to want to continue working with you. As a bonus point, feel free to remind them of the results you have been able to get them in the past, and how it impacted their lives.
Tip #3 - Communicate the payoff, not only the price tag
I want to encourage you to put yourself in the shoes of your client, or better yet, remember the last time you made a financial investment in your business that was outside of your comfort zone. What were your concerns? What was running through your mind?
I’m pretty certain that at some point before making that investment, you thought to yourself, “What if I invest this money, and it does not work for me?” We all want a “sure” answer. We all want to know that it is going to work for us individually. That is the whole concept behind testimonials — to allow people to see themselves reflected in your solution so that they begin to believe that it will work for them too. It is so important that you communicate the payoff, the value, and the benefits that accompany the price tag so that the dollar amount itself becomes secondary to the elevated experience your clients will have as a result.
In Episode 6, I talked about how charging more for your services will allow you to serve your clients better. Taking some points from that episode, three areas where you can elevate your client experience are your customer service, your onboarding or offboarding sequence, and your client communication.
Start with each of those three areas and see how you can elevate the experience of your clients. Revisit the areas where your clients have either complained or made requests to see if you can now meet those needs as a result of your new pricing. Did your clients request for more worksheets? Did they want access to learning from guest experts? Are there materials, resources, or opportunities that you can now provide, in line with what they are already asking for?
When you can paint a picture of how the experience and the results will be elevated, thanks to the new pricing, you make the cost secondary to the experience. This simple strategy will go a long way in helping your existing clients decide to continue working with you.
Now, I want to say that even if we have covered these three tips, there will still be clients who either cannot afford to work with you at your new price point or simply choose to discontinue working with you, and that is okay. It does not mean you did anything wrong, or that they do not appreciate or value your service. It simply means they are not intended to continue their journey with you as their guide, and that is okay.
It is important that you are willing to release the clients who are not meant to continue working with you. In releasing those clients, you are making space to serve clients who are meant to take this journey with you and to serve them at the highest level possible. I would be remiss not to say sometimes it hurts. Sometimes the clients you want to continue the journey with are the ones who are not meant to and that can be a hard reality to embrace. So I encourage you, as much as possible, to release old clients on good terms. Thank them for allowing you to serve them and for their role in serving your business, and wish them well.
As you can probably tell by now, there are a lot more factors to consider when raising your prices than just the number on the price tag itself, and we have discussed some of those key areas in today’s conversation.
So let’s do a quick recap.Â
We first discussed that it is important for you, as the entrepreneur, to understand the reason behind your price increase before you try to communicate it to your clients. Then, we discussed three tips that will allow you to roll out your price increase while keeping as many of your existing clients as possible. Those three tips were giving your clients time, communicating clearly and often, and communicating the payoff and not only the pricing.
In Tip #1, we emphasized the importance of giving enough notice to your clients. Giving them and yourself more time to think things through is better than surprising them with something they did not sign up for.
Then, in Tip #2, we discussed that your way of communicating the upcoming changes should convey excitement, clarity, and conviction. See to it that you believe these changes are in the best interest of your clients.
Lastly, in Tip #3, we highlighted that communicating the payoff — not only the pricing, will help your clients feel secure in continuing to work with you at that new investment level. They will reap the benefits, the added value, and the elevated experience that only you can deliver.Â
When each one of these tips is combined, you are not only able to easily encourage your clients to remain working with you, but also get them excited about it.
Friend, I am so grateful that we spent this time together. I know that you are going to apply these tips to your business because you are an action taker. Once you do, make sure to join the conversation on our Instagram page @rjconnellconsulting and let me know how these tips help you in your business.
In next week’s conversation, we are going to talk about whether you should ever offer your services for free. If so, we will determine under what circumstance. It might get a little controversial, and you may not agree with what I have to say, so make sure you are subscribed to the podcast on your favorite listening platform so that you do not miss when the next episode drops next Monday!
I can’t wait to chat with you at the same time and place next week. Until then, I wish you coins, confidence, and all the bags! Bye for now!