If you read our article last month on signs that you’re undercharging, you may be left wondering how to get your prices more in line with what they should be. Here are some ideas to get your rates moving in the right direction.
Raise your rate for new clients and projects
This is the easiest one – put your rates up when you get a new client. Similarly, though, you could also raise your rate slightly when you take on a new project from an existing client.
Some small businesses regularly raise their prices a little once a year or even every six months – clients accept it because it’s in the contract and they’re used to it.
Give some warning
A lot of people feel a misplaced sense of guilt about putting their prices up for existing clients. It’s understandable but you need to break through it if you don’t want to find yourself underpaid or constantly looking for new clients.
Try telling your clients in advance that your rates will be going up on a certain date. You could even offer a ‘buy now/book now and make a saving’ deal to prompt a rush of business before your rate change.
This window will also give you a chance to look for new clients in the event that any existing clients don’t accept your new rates.
Gently does it
Putting your prices up gradually is better than one big hike – incremental rises will be more palatable to customers and this way you should also be gathering an increasingly loyal base of customers who would rather continue to work with a supplier they trust than hunt for someone slightly cheaper.
Time it right
The timing of your price rise can have an impact – retailers, for example, sometimes put their prices up slightly in the run up to Christmas when people need to buy gifts and are less likely to quibble than in January when they’re skint and have more time to hunt for a bargain. How could you apply this to your own business?
Tighten up your billing
Are you making sure that you are billing properly? Make sure your income isn’t taking a hit because of issues such as:
- Not tracking all the hours worked
- Providing endless revisions for free
- Not billing for meetings and phone calls
- Failing to reclaim legitimate expenses
Assess your pricing structure
If you offer a service and charge by the hour, assess whether that’s the best option for you. It may be more profitable for you to charge a flat fee – it’s also often better for the client because they can budget more accurately.
You should not apologise for putting your rates up. As long as your prices remain reasonable and competitive, they should be accepted by customers – remember, it’s a business decision and nothing personal.
You’ll have to face the fact, though, that in raising your rates you may lose customers – some may not think the new rate is worth it whilst others might feel they can’t afford it. Perhaps those are customers that you can’t afford to keep anymore anyway and it may be the best time for you both to move on.
Have you raised your rates? How did it go? Do you have any tips to share?[Image: FreeDigitalPhotos.net]