Every single one of us wants, no, needs to make more money, but I bet you didn’t know that your clients need you to raise your prices.
I know it sounds crazy, but hear me out.
Your clients don’t want to pay you more just because you’re a bubbly ray of freakin’ sunshine, they want to pay you more in exchange for exponentially more value.
Think about how you currently serve your clients.
In some cases, you quote a project, and whether you simply underestimated the work involved, or scope creep added unexpected costs.In other cases, your clients request a variety of small tasks that add up over time.
You’re left with two poor choices.
- Eat the added costs, or
- Pass the added costs on to your client.
Choice #1 always sucks. It decimates your profit margin, decimates your enthusiasm, and encourages you to cut corners.
You didn’t start a business to lose money. Every minute you spend working is a minute away from your family, and your time in this world is finite, so why not make it count and be rewarded handsomely for it?
Don’t think for a second that you’re clients can’t tell when you’re anything less than ecstatic about working with them. They want you to love working for them, and if you don’t, you shouldn’t be working together in the first place.
When you cut corners because you don’t love what you’re doing, results start to drop off. Maybe your work is a little less polished, you start to miss deadlines, more time goes by before your return calls or emails, and you become less proactive. That gets noticed and creates a sense of animosity.
Choice #2 sucks almost as much as #1 because it makes your client feel like you’re nickel-and-diming them.
You are entitled to be fairly compensated for your work so you should never feel guilty about that, but rather than invoicing your clients for each individual task you preform, simply charge more and provide unparalleled service.
This is simple for new clients since you’re stating from a clean slate, but you’ll have to ease existing clients into higher prices incrementally. You also need to be aware that raising prices will cause some prospects to turn you down and some clients to end their relationship with you. That’s OK because you’ll replace low-margin clients with high-margin clients who value your work.
When you raise your prices and a client has additional requests, when you underestimate the scale of a project, or when moderate scope creep pops up, you can simply handle it without annoying and tedious billing. You will be more enthusiastic and more profitable, and your clients will value your work more and feel like you are a trusted member of their team rather than just another vendor trying to extract more money from them.
It’s all about presentation. They perceive less impact when you charge them a single fee than a bunch of smaller fees.
As an added benefit, higher prices convey higher value.
There is plenty of competition at the bottom of the pay scale and most are more than willing to undercut each other in a race to the bottom. However, there is far less competition at the top of the pay scale and few compromise on their pricing because they have confidence in the value they bring.
Which table would you rather sit at?
I’m not going to lie; raising your prices is one of the scariest but also one of the most important things you can do in your business.