When and How to Raise Your Prices
The way you price your products and services matters. There are so many details to consider like — your overhead, the cost to produce your products and services, the value of your time, and how you hope to position your business.
The decision to raise your prices often stems from an idea like this: In order to work fewer hours (or, let’s be honest, in order to work reasonable business hours), and serve fewer people through a more personal experience, the prices of your products and services should — or need to — be raised.
So, should you raise your prices? It’s a question that seems to lead to even more questions: What will happen if I raise my prices? What if prospective clients say my prices are too high? In today’s episode, we’re going to share when — and how — to raise your prices.
When and How to Raise Your Prices
- You should raise your prices when you can’t afford not to raise your prices. There was once a season in our business when Andra and I realized, we couldn’t afford to operate With Grace and Gold, full-time, as a team of two, unless we raised our prices. We needed to raise our prices not only so we could serve fewer clients with more care — but we also needed to be compensated fairly for the value we were bringing to each client we served. Your time is valuable, too. What do you discover when you divide your income by your hours worked?
- Similarly, you should raise your prices when you are spread too thin. If you’re working day and night — or you need to book an extremely large number of clients in order to make ends meet — it’s time to raise your prices. We think of it this way: By raising your prices, you could serve a smaller number of clients, while earning the same amount of revenue — or ideally, more revenue than before. If you are spread too thin, consider how raising your prices could help you.
- Third, you should raise your prices when you’re preparing to transition or grow. As an example, if you are hoping to open up a bit of time to pursue a new offering, you might raise your prices to reduce the number of clients you are serving while you develop or grow a new area of your business. Or, if you’ve created a meaningful change in your business — something we talked about in Episode 13 — you should raise your prices to reflect this new season in your business.
These are a few reasons to compel you to raise your prices. So, once you know you’ve got to raise your prices to keep your business moving forward — and even expanding — how do you go about raising your prices? We’ll talk about that after the break!
Before the break, we talked about 3 reasons to raise your prices. So, how do we go about raising our prices in a seamless and strategic way? There are a few approaches to choose from:
- First, you might consider raising your prices in a season that makes the most sense for you and your business. If you’re a wedding professional, raising your prices in preparation for booking season can be extremely helpful. If you’re another kind of small business owner, raising your prices yearly, quarterly, or by season can be a sound strategy. When you raise your prices in a regimented way, changes in your pricing won’t come as a surprise — and may even be expected — to those who have followed along with your business over the months or years.
- You might consider raising your prices when you debut a new offering. Maybe you’ve rearranged the way your packages are structured. Maybe you’ve found ways to add more value to your existing packages. Or, maybe the way you’re presenting your packages has changed. Consider offering tiered pricing — a less expensive option, a middle-of-the-road option, and a high-end option. That way, you can provide your prospective clients with choices.
- Lastly, you might consider raising your prices with awareness of your competition. Are you aiming for your business to be on the low end, high end, or someplace in between? Sometimes, being aware of your competition and how your competition has priced their products and services, can help you to price yourself wisely.
So, what about the logistics of all this? Here are a few helpful tips:
- Always be willing to revisit your brand and web design as you consider raising your prices. Your brand and web design should support your pricing; a high-quality, elevated online presence can lead visitors seamlessly toward booking your high-end services more confidently.
- Be prepared to receive fewer inquiries overall — but to receive inquiries from prospective clients who are more prepared to book. Seeing elevated prices can be intimidating and can prompt fewer prospective clients to reach out to you. On the other hand, those prospective clients who do reach out to you — already knowing your pricing — could be more prepared or ready to get started.
- And finally, always have confidence in the value of your products and services. Prospective clients may say your prices are too high — and that’s OK! So long as you are truly offering a quality product, service, and experience, and so long as you are truly bringing value to those who purchase your products and buy your services — you will connect with people who see the value in your products and services and are willing to invest in them, too.
In the end, it’s important to ensure every area of your business works synergistically — that your products and services are polished, that your process is seamless, that your brand and web design uplift your business, and finally, that your pricing is reflective of the value you bring to your customers and clients.
So, update your Services page or Pricing Guide, share freely about the value that each of your products and services gives to customers and clients, and be prepared to connect with prospective clients who see the value in what you have to offer, too.
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