Have you heard the one about your prices, your clients, and your bank account? No, this isn’t some joke where three things walk into a bar. Because, let’s face it, you’re working so much that you haven’t seen in the inside of a bar (or restaurant or even your eyelids) in ages.
This one goes something more along the lines of this:
You’re supporting a full roster of amazing clients (go you!) and even though you’re working harder than ever, you don’t feel like your bank account can’t sustain you for the long term. Not only that, you started a business so you could enjoy your life, yet it isn’t supporting the lifestyle you want to live.
We’ve all been there. At some point, we have the realization that if we want to make $X, we have to work with 5,002 clients (or sell all those ebooks). That doesn’t seem quite feasible.
So what do you do? Instead of hiring a bunch of junior work associates (don’t worry, we’ll get there), you decide to raise your rates.
First thing’s first… Here’s what not to do.
You say, “I’m not working this way anymore!” and send a mass email to your clients. Because you considered neither their contracts nor their needs, they all decide not to pay your new prices.
Short-sightedly dumping your business into the garbage and lighting the match is a great plan… if you want to piss everyone off.
So we aren’t going to do that. The goal here is to support your clients and continue to serve them better.
Often, entrepreneurs fresh in their journey will set their prices and packages, then do a bunch of marketing to call in those 5,002 clients. Then, they work their buns off to fulfill those clients.
When they wrap up those projects and come up for air, they’ve discovered that the garden of leads has totally withered. They were so focused on keeping those clients happy, they let go of all the client-generating tasks like reaching out to folks to have coffee chats and writing new copy to attract ideal clients.
So they dash off some Instagram posts and invitations to chat, fill the roster once more, and around the circle they go.
That, my dear friends, is no way to live. Predictable income that supports your lifestyle is not found in the hurry-up-and-wait, feast-and-famine spiral.
You have to be crystal clear about how the process is going to work. Before you can raise your prices with current clients, think through your offers and know your new options inside and out.
Write out the following for yourself so you you’re prepared to respond to clients:
When you let folks know that you’ll be upping your rates, there will be questions. Having well-thought out answers is the most supportive way you can guide your clients through to saying yes to the new dollar amount you present them.
You also have to know how this will work for your internal process. Client relationships are built on trust, and a little mistake won’t rock the boat, but if the entire process is not smooth for them, you could be setting yourself back in their estimation of you.
Okay, you’re ready for this. You prepared your internal processes, you know exactly what the next steps for your clients will be after they say yes (or if they say no). Now, it’s time to tell them.
When my clients ask me how to raise their rates, I tell all of them to talk to one client at a time. It’s so worth it because you’ll lose fewer people AND if you lose one, you can call in a new client in real time so you aren’t financially scrambling (which is possibly why you’re raising your rates to begin with!)
With the slow-and-steady approach, you work this process in a smart way. If someone decides not to continue a relationship with you, you haven’t seriously blown up your business (like if you told everyone at once that they have to pay you more). There’s still time to support everyone while keeping your business and finances intact.
Success Tip: Talking to clients slowly and methodically is also helpful if you want to change the way you’re working with them. Say you want to stop offering comprehensive social media management and just provide clients with copy for their posts. Call in one copy-only client and release one management client. Repeat.
When you talk to clients about raising your prices, you’ll possibly restructure a package with new services or offers. Present them with the value they’ll gain as a result. Tell them why it’s good for them and why it’s in better service to them than how you’re currently working together.
One caveat: if you haven’t raised your rates for many years, you have justification to keep the package relatively the same!
But say you’re just keeping the services the same and raising the price. In that instance, you really have to punch up the value increase. You’ll also have to be prepared to hear no, thank you.
Success Tip: Present the increased value first, then talk about your new rates after they’ve envisioned how the new plan will benefit them.
If someone decides not to renew their contract with you at your higher rate, that is okay. The Universe abhors a vacuum, so breathe into it and know you’ll find a client to replace that income (and then some).
After a deep breath, graciously tell your client what to expect as you close out your time together. Client relationships that are wrapped up in a supportive, thoughtful fashion have the possibility of coming back to you. If you decide to slack off and stiff them on deliverables, there’s a good chance that you won’t be looked upon favorably in the future.
It’s possible someone will decide they like working with you, but aren’t interested in the new rates and package you offer. Great! This is the chance to do a mini-sales call to reassess how you can serve them.
Be open, listen to what their needs in this season are, and offer a few new custom plans based on what you discover during this call.
One note here: If you decide you’d rather not work with this client in a new fashion, simply don’t offer this as an option.
Raising your prices is a necessary step as an entrepreneur. It’s almost a rite of passage! You can proudly wear that badge of honor and say, “I raised my rates…and didn’t piss off my clients!” When you do it in a way that is still in service to your clients and offers support throughout the entire process, your trust and client relationships will survive.
Then, your business can support the lifestyle you want and you can finally enjoy the inside of that bar (or your eyelids)!