CC BY-SA 3.0 Nick Youngson
When was the last time you raised your prices?
For many bigger businesses this will be a standard annual procedure - I'll bet your car insurance/electricity bill/rent increases at renewal year on year?! And so it should, as inflation goes up we should at the very least be raising our prices in line, otherwise we're effectively giving ourselves a pay cut year on year!
And yet I meet so many small business owners who haven't raised or reviewed their prices in years. They set their prices when they first started their business, at a time when they just wanted to work with ANY client, just to get off the ground and pay the bills, their self-confidence wasn't exactly at it's peak, and they didn't have many client testimonials to prove the value and results they could deliver, so they undersold themselves.
And they've never revisited the subject since, or increased their prices as their skills and delivery have improved. For many business owners with repeat clients, there can be a lot of fear that their clients will baulk at any price increase, wrongly believing (or allowing) their clients to buy solely based on price, and this fear can paralyse us despite knowing we're undercharging for the massive value we deliver.
So what can you do to start charging what you're really worth???
Get in the habit of reviewing your prices annually
Well if you haven't raised your prices in over a year, it's time to look at that. In the way that we expect the cost of living to increase slightly with inflation, it's important to realise that your clients actually expect you to increase your prices slightly each year, and unless you're doubling them overnight, they're unlikely to particularly react at all. One of the easiest times to raise your prices is a "new year" whether that's a calendar year in January, a fiscal year in April or your business year. And as long as you communicate the increase to your clients clearly and give them some advanced notice chances are it won't cost you any of your clients. By making it a habit to review your pricing structure each year and looking to slightly increase your prices, your clients will become accustomed to it, and you'll stop seeing it as anything out of the ordinary. As long as you're delivering great results your clients will be happy to pay.
Define your brand, your USPs and your identity
One of the easiest ways to start to increase what you're charging is to get clear on your USPs, your values and what experience your company provides to it's clients.
Defining who you are and what you do differently allows you to charge a premium for that service, because no-one else can offer that same experience. It stops you having to compete with competitors on price, and instead means you compete on value and experience which are much more valued by prospective clients.
Take hairdressers for example, the hairdresser we choose to use will reflect our personal values and we'll be drawn to the business that's the best values fit for us. I have friends who pay hundreds of pounds to get their hair done every few weeks, they know their hairdresser really well and they go to a luxurious salon and get a head massage and a glass of bucks fizz to sip on whilst they wait. They pay a premium for this service, and very willingly, it's an experience they really enjoy and value. Equally I have friends who have hairdressers who come to them in their home, there's no pampering, no head massage or champagne, but they're busy people and this minimises the time they have to take out of their day - they can still watch the kids/run a hoover round the lounge whilst they're waiting for the colour to take and for them this is a really valuable service which they're willing to pay a good price for.
Once you're clear on your values, it'll help you to identify and target your "tribe" - those ideal clients who get you; they like what you do, the way that you do it and they're very willing to pay for it. When you stop trying to please the whole market, you stop having to compete with every other provider out there, and instead by tailoring your service to your ideal clients, you can work with people who highly value what you do for them, and are willing to pay you well for this.
Charge for OUTCOMES
Another key part of charging what you're worth is to start charging based on the outcomes and results that you deliver, rather than the process or the time involved. Your customers are not buying your time, they are buying an outcome, a result and often a solution to a problem, and sometimes it's easy to forget that and base our prices on how much time it'll take us to deliver, rather than on what that end result is worth to the client.
Coaching is a great example of this as clients pay for results, not for time. I speak to most of my clients at least twice a month, and on some calls it may take just 10 minutes before a client has a massive insight into how to move their business forward to the next level, whereas on other weeks we may spend over an hour discussing a particular challenge or problem and finding the best solution. My clients pay me because I help them achieve their goals, whether that takes ten minutes or an hour, the outcome is just as valuable.
Remind yourself of your own value
Sometimes it can be easy to lose sight of our "greatness" and the massive value that we deliver to our clients. Because we're "in" the business every day, and we do what we do so well, we can start to forget how unique that is and we can take it for granted and undervalue it. So if you're looking to raise your prices and start charging what you're worth it will probably help to remind yourself of the massive value that you deliver for your clients on a daily basis. Update your client testimonials, re-read previous ones, print them out and keep them on the wall where you can see them every day, to remind yourself that your value is not tied to the price you charge, your value is tied to the results that you deliver.
Building up your own self-confidence will make it easier to raise your prices and feel clear about why your clients love to work with you and get really comfortable with why you charge what you do.
So, my challenge to you now is to go away and raise your prices - stop selling yourself short and start charging what you're worth.
P.S If you're struggling to charge what you're worth, you're working too many hours or you're not earning the income you want and you'd like some help with that, just click here to book a call with me.