One of the most challenging things to do as an entrepreneur is to develop your pricing, particularly if you are in the service business. Because most of us struggle with valuing our products and services, and when starting out, we just want to get new clients, so our tendency is to establish pricing that is too low.
I spoke this week with a very talented events planner who shared with me a great story about how she learned her prices were way too low. She had been hired by a bride to help her plan her wedding. In the process, the bride shared a Google Doc with her not realizing that on the document were the bride’s notes pertaining to other wedding planners she had spoken with before she hired her current events planner.
The events planner told me, she could clearly see that her prices were “way lower than everyone else on the document”. The bride had also made other comments next to several of the other events planners she spoke with such as, “never called me back”, “didn’t like her attitude”, and next to the event planner she hired, she wrote, “loved her energy, really nice”.
The very talented (and very smart!) events planner immediately raised her prices!
So here’s three signs you need to raise your prices.
1-Raise them right now-because I guarantee they are either too low or on the low side. Every time I work with a new client-the first thing I do is raise their prices. It’s hard and they rarely want to do it-but one, it gives them renewed confidence and two, they ALWAYS get more clients-so without reading number two and three below-raise your prices!
2-You’re starting to resent doing the work for your current prices. Whether you know where you stack up with your competitor’s pricing or not, there comes a time in our businesses where we start feeling resentful that we’re not making enough money for our time. I have seen this over and over with my clients-it’s some kind of intuitive sense that it’s time to tweak their rates again.
3-Your practice or business is full. Whether it’s a program you offer, or you’re in a service-based business, when you’re full-it’s time to raise your rates.
Just to clarify, it probably isn’t a good idea to raise your prices on current customers and clients. I’m not saying don’t ever do this, but if you’ve been in business 3-5 years, you have probably tweaked and changed your rates frequently over the time you’ve been in business, and you don’t want to always pass along those price increases to the clients who’ve been with you from the beginning. At some point, you may have to give a price increase to your long-term customers, just not every time you raise your rates.
So, take a look at your pricing-does it make sense? What’s it based on? An hourly rate? Is there logic behind it? Do you feel good about it? Do you feel valued from it?
Remember, you can always test it along the way, before you make a wholesale change, but reviewing your pricing every 6-12 months is a very worthwhile, and lucrative exercise.
|Mandy works with talented, high energy self employed professionals and very small businesses who struggle to market their business effectively, stretch their capacity and play a bigger game. Mandy’s client’s receive proven, specific information on what they need to do to get more clients and grow their business. As a result, those who coach with Mandy increase their business, get more clients and make more money, faster and easier than they ever would have on their own. Sign up for her free Cd “7 Productivity Secrets of Successful Entrepreneurs” right down below.|