When was the last time that you raised your prices for your training services? Do you review your pricing regularly or have your fees stayed the same since you started your self-employed journey?
If you haven’t raised your prices in a while, it’s likely that different beliefs are holding you back.
- My clients will go to someone cheaper.
- I’ll lose all my clients and go out of business.
- My clients will be angry and disappointed with me.
- My clients won’t think I’m worth my new rates.
- My clients will complain about me to others.
These are all common blocks.
For a surprising number of us, raising prices can be an emotional and nerve-wracking process. We worry that our clients will walk away or tell us that we’re not worth more money. Honestly, you’re not alone if you’re prone to catastrophizing what might happen when you think about putting your prices up.
But is it so wrong to charge more?
Realistically, most businesses raise their prices at some point, usually for one of three key reasons:
- To reflect an increase in inflation
- To reflect increasing costs of buying from suppliers
- To reflect an increase in demand
Big brands do it on a regular basis and we consumers barely bat an eyelid. And yet, for freelancers and small business owners, raising prices can be excruciating. Maybe it’s because, when we work alone or in a small team, pricing feels personal in a way that it doesn’t for bigger businesses and their customers. If a client rejects our prices, it can feel like they’re rejecting us.
If we step back from the emotions associated with raising prices, it is perfectly reasonable to expect your charges to increase annually in line with inflation. There’s nothing wrong with wanting to cover the cost of living or from wanting to be paid more as your experience increases and your services become more in demand. After all, you have worked hard to develop your skills and knowledge, and probably invested a lot of your own money along the way.
So, how can you raise your prices without losing clients? Here are my top tips:
- Be prepared to let go
Although you want to put your prices up without losing clients, the reality is that some businesses will use an increase in fees as a time to shop around for cheaper alternatives. This isn’t a criticism of your value or worth – merely, the reality of their budget.
I always try to put the shoe on the other foot. I imagine something luxurious that I would love to buy but can’t right now. The fact that I can’t buy it doesn’t make the item a bad product. I don’t expect the sellers to lower their prices or think that they’re bad people for pricing outside of my budget. I also recognise that, although I can’t buy the item, there are people who can afford it (with spare change) and the product is perfect for them.
If a client does decide to go elsewhere, it’s important to be prepared to let them go. Ironically, it’s this relaxed attitude and the sense that you aren’t dependent on them that will probably entice your clients to stay with you.
And, if you do lose a client or two, try to see it as freeing up your time to find new clients who will pay your new rates without hesitation.
- Be honest and give fair warning about your intended price increase
I recommend writing to your existing clients to explain that you intend to increase your fees within a specific timeframe. Tell them that you hope that you can continue to work together but that you want to give them warning in case they want to pursue other avenues.
- Explain why your prices are going up
Many businesses increase their fees in response to growing business outgoings. For example, an upturn in venue charges, insurance, travel costs, printing and marketing costs, etc. all have to be covered somehow. You might need to explain that your own costs have increased and that you’re changing your pricing to reflect this.
One thing you should never do is suggest that you’re simply increasing your prices to boost your profit margin. Clients won’t want to pay more without understanding why it’s necessary to your business or how it’s going to make a positive difference to theirs.
If you’ve been over-delivering for a while, you might decide to tell your clients that your rates need to better reflect the value you’ve been adding and that you don’t want to compromise on quality by taking on too many clients.
- Thank your clients for their loyalty
As a rule, people want to feel appreciated so, before you start charging them more, let your clients know that you really do thank them for their loyalty and business and that you continue to be committed to meeting their training needs.
- Add features and value
One way to feel confident about increasing your prices is to add new features to the services you provide to reflect the upturn in your fees. If you already feel your clients will be getting great value, even when they’re paying more, it’s important to remind them what this value is for their business.
- Give a lower price option with fewer features
If you have a client or two that you want to keep but you know that they have a tight budget, you could give them a lower price option that has fewer features than your full price offering. This can also be a good way of providing services to new or smaller clients while giving them the opportunity to buy your complete services at the higher price point in the future.
- Explain but don’t apologise
Although I believe in explaining price increases to clients, it’s important that you don’t apologise for your new rates. You have nothing to apologise for. You are in charge of your own business. You can charge whatever you want to charge – or whatever the market can bear – without having to apologise to anyone. Honestly, you’re not doing anything wrong!
Is it time to raise your prices?
When was the last time you quoted for training work and didn’t get the job? If clients consistently say ‘yes’ to your prices without batting an eyelid then it could be a good indication that it’s time to raise your rates.
Equally, if you put your rates up and find that you only ever hear the word ‘no’ or a resounding silence, then you could be aiming too high.
In my experience, your rates will be about right when you hear a majority of ‘yeses’ but an occasional ‘no’. Remember, it’s OK if your fees don’t fit every budget. If you can show the value you bring to the table and it still comes down to price then you and the potential client probably aren’t the best fit, but someone out there will be, for both of you.
For more advice, you can also download a recording of the webinar I hosted with Chartered Accountant and pricing guru, Alex Hewlett, for just £29. Get your copy of “Creating a profitable training business: how to charge what you’re worth, and get paid on time (every time)” here.