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How to Raise Your Prices

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Whether you are an entrepreneur that provides services, a local restaurant owner, or that you have an online shop for the latest fashion accessories, you will probably have to raise your prices once in a while. It is often necessary to increase your rates to follow the cost of living. You may have to deal with difficult situations too. How can you make sure that your raise will be accepted, or at least tolerated, by your customers?

Prepare Yourself

To increase your chances of success with your customers, we suggest you prepare your raise consequently. It is not something we do on a whim, without telling anyone, on the contrary. There are many reasons why you would need to increase your prices, and it is entirely understandable. Maybe your raw material prices are higher, or you may have taken courses or training,s that make you more competent. Otherwise, when you started, you offered your services or products at a meager price to test the markets, and you now want to be paid the right price, perhaps. Nobody likes to hear that they will have to pay more; however, there are ways to tell them and even keep a good relationship with them. Unfortunately, one of life’s certainty is that all prices end up to be higher.

Before raising your prices, we recommend you to calculate it. When was the last time you changed your rates? Do you know the costs of your competitors? What was the inflation rate of the previous years? These questions can help you to calculate the right raise and stay competitive. Always keep in mind your customers and do not hesitate to look for market studies or to update your buyer personas. Furthermore, it is vital to choose the best moment to announce your price change. Your customers may be less comprehensive if it is the day after the announcement of bad news or the loss of many jobs in your area. 

Prepare Your Customers

Now that you know why you want to increase your rates and that you have a match plan, it is the time to prepare your customers. You will get better results if you notify your clientele a few months before. Often, a new year or the beginning of a new project could be good moments to change your prices. If you warn them, they will have the time to adjust their budgets consequently. Please make sure everyone of them know. Although it is always better to discuss it in person, you can send them an email or call them too. You can also mention it on your bills or in your email signature, so no one is left behind. 

A Few Tips on How to Tell Your Clientele

Here are a few tips to have your price changes accepted by your customers. To begin with, stay true with them when you inform them regarding your intent to increase your rates. Do not start to give excuses that are not related to your field. For example, do not mention the oil price increase when you work from home or if you take the metro. Stay polite, honest, but firm. If your clients think that you exaggerate or you lie, this will compromise your business relationship with them. Explain to them that you tried to keep your prices unchanged as long as possible, but unfortunately, you need to increase your rates.

Moreover, you can mention that this increase is well deserved if you are offering better products or services. If you completed training programs or courses, learn new languages or software, or because you are now a more experimented worker, you are probably doing a better job than when you started. It is then reasonable that your rates are higher. Once more, do not give this reason if you feel it is not the case. The importance is to create a trust relationship between your customer and you, so he or she wants to work with you, whatever the price.

Whether it is while taking with them or in a letter, it will be essential to look confident. Stay available to answer questions if needed. Some may try to negotiate your price change or even refuse it. Even if it is better not to back down, not all clients are the same. It is at your discretion. If you feel that one of your valuable customers is reluctant, you can offer him or her a little bonus to show that you care about them and your business relationship. It could be a bank of hours at a special rate or to offer him to manage his projects as a priority. You only need to feel comfortable with it and do not make exceptions to all.

In conclusion, it would probably be better to do a small raise every year than a major one every ten years. Remember that you must stay authentic and transparent in this situation. Unfortunately, we cannot guarantee you that you will not lose any clients during a price change; however, there will always be someone else that can do your job for less. It is the relationship you have with your customers that can make a huge difference!