How to Raise Your Prices and Increase Your Profits Without Losing Any Clients

How to Raise Your Prices and Increase Your Profits Without Losing Any Clients

In this episode, Annette will teach how to raise your prices and increase your profits without losing any of your clients. She will clear some of the misconceptions about increasing your rate such as people will not buy from you when you increase your price, and it does not always happen that way.

There might be risk when you increase your price but it should not have any negative effect on you and your clients. There are certain things that you just need to consider and think thoroughly about. One of these is understanding your client wants and needs, this can be your first step before you decide on how you can increase your price. Another is doing research on your competition. You may be able to know and compare both of your prices and services offered.

Grab a pen and take notes of Annette’s wisdom on how you can raise your price and increase profit without losing your clients. 

Highlights of this episode:

  • How to determine a fair price for your business.
  • How many clients can you afford to lose if you increase your prices
  • Keep track of who leaves and why in order to improve your business
  • The importance of doing research on your competition
  • Give your clients an incentive to stay with you during a price increase
  • Understanding your clients wants and needs for the betterment of everyone

Resources:

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Introduction

Thank you for tuning in to the Financial and Lifestyle Freedom Podcast. In this episode, I'm going to show you how to raise your prices and increase your profits without losing any clients. Hey there, my name is Annette Ferguson and in this episode, I'm going to teach you how to raise your prices. It's a common misconception that when you raise your prices, people will stop buying from you, but that's not always the case. There are a few things that you can do to make sure that when you do increase your prices, it doesn't have a negative effect on your bottom line. In fact, it has the opposite. So stay tuned, and I'll show you exactly what to do. And do remember to subscribe to this podcast. 

Factors to consider before raising your prices

1. Understand your clients’ want and need

So number one, understand what your client’s want and need. If you're providing a service or a product, it's important to make sure that you understand what your clients want and need. This way you can be sure that you're providing them with what they're looking for. And you can also be confident in raising your prices if necessary. There are a few ways to go about understanding your clients better. First, you can ask them directly. This can be done informally through conversation or formally through surveys or interviews. You can also observe your clients to see how they interact with your product, service or indeed your content. Pay attention to their body language, the words they use and any feedback they give you. And you can look at industry trends to see what's popular amongst your target market. By taking the time to understand your clients better, you'll be in a much better position to provide them with what they want and need, and therefore to be charging them a price they are willing to pay. 

2.  Do some research on what similar services are charging

Number two, do some research on what similar services are charging. Now, I never ever say to people to price the same as their competition, because after all, your competition could quickly be running out of funds and going out of business. But before you settle on a price, it is important to do some research on what similar businesses are charging for their similar services. This will give you a good idea of the typical going rate for a particular service. And once you have an idea of what others are charging, you can then think about your prices in relation to those. You might find out that you're significantly cheaper than your competition and you might actually therefore want to raise prices even more. On the other hand, you might find you're charging significantly more than others and therefore, you need to ensure your positioning puts you in a place where that is not going to be detrimental to your business. So by doing some research on pricing, you can assure that you're setting a fair price for your services. 

3. Set a price that is fair and profitable to both you and your clients

Three, set a price that is fair and profitable to both you and your clients. One way to determine a fair price is to look at your costs. Make sure that you are taking into account all of your costs including materials, labor, overhead, shipping, bank charges, transaction fees, the time of you and anyone in your team. Once you've calculated your costs, add a reasonable markup so you can make a profit and remember to include to allow for taxes.  You can determine if you believe your price is fair. Of course, your customers ultimately don't actually care about your costs, they care about the value you provide. So you need to take that into account when you're looking at what is fair and profitable for both of you. Once you determine what a fair price is, you can then start to look at raising your prices. If you've been in business for a while, you may need to slowly raise your prices so that your customers can get used to new pricing. However, if you are new in business, you might be able to charge more than your competitors, since customers may be willing to pay more for a new product or service. Whichever strategy you choose, make sure it is fair and profitable for both you and your clients. 

4. Explain the reason for the price increase

Number four, explain the reasonings behind the price increase to your current clients. There may come a time when you do need to raise your prices in order to cover for example, increased costs. When this happens, it's important to be honest with your clients and explain the reasoning behind price increases. Doing so helps you build trust and maintain good relationships with your clients. Additionally, it's important to be clear about what the new price will cover. For example, if you're raising the price of a service, make sure your clients understand what they will receive for the increased costs. By being upfront and transparent about price increases, you help ensure that your business continues to run smoothly. You also need to be very clear about the timing on when the price rise takes place. Is it from their next payment, or is it say, three months from now. 

5. Give clients an incentive to stay

Number five, give your clients an incentive to stay with you during a price increase. Raising prices can sometimes lead to customers choosing to, unfortunately, take their business elsewhere. In order to prevent this from happening, it's important to give your clients an incentive to stay with you during a price increase. This could involve offering a discount for loyalty, providing additional services or simply being upfront about the reasons for the increase. By taking steps to keep your clients happy, you can ensure that your business remains successful even when prices go up. 

6. Acknowledge that some customers may leave with the price increase

Number six, acknowledge that some clients may leave you as a result of price increases. While some customers may be willing to pay a higher price for your product or service, others may choose to take their business elsewhere. It's important to be honest with yourself about the potential impact of a price increase before making any decisions. If you think that there is a chance that some clients may leave as a result of the price increase, be sure to factor that into your decision making process. Ultimately, you'll need to decide which is best for your business. But acknowledging the possibility that some customers may leave, can help you make the best possible decision. But the likelihood of 100% of your customers leaving is very small. So think about it. If you increase your prices by say 20%, how many clients can you then actually afford to lose and still end up with more revenue and profit in your bank account?  You need to crunch the numbers to work that one out. 

7. Remain professional and courteous to all clients

Seven, remain professional and courteous to all clients regardless of whether they stay or go, which I'm sure I don't need to tell you. But whenever we raise prices, like I said, we risk losing some of our hard earned clients. It's important to remember that no matter what our prices are, we should always remain professional and courteous to all of our clients, both those who stay and those who unfortunately choose to go. By maintaining a positive attitude and still providing a top notch service, we can increase the likelihood that our clients will continue to do business with us even when our prices go up. And while it's never easy to lose a client, sometimes raising prices is necessary in order to keep your business going. So the next time you find yourself having to raise prices, remember to keep your head up and your clients best interests at heart. 

8. Keep track of those who leave and their reason for leaving

Eight, keep track of who leaves and why in order to improve your business in the future. If clients do leave, they happens. It's important to keep track of who leaves and why. This information can be used to improve your business in the future. Perhaps you'll find a certain type of client is more price sensitive than others or maybe you'll discover that certain products or services are less popular than others. Whatever the case may be, this information can be used to make your business more successful in the future. 

Closing

As a small business owner, there will come a time when you need to raise prices. By following these tips you can do so without losing clients and whilst remaining profitable. Thank you so much for tuning in, to this episode today. If you did enjoy it, please make sure that you subscribe in whichever podcast player you happen to be listening to and also do make sure you leave us a review. It helps us get found by other business owners just like you. Thank you so much for tuning in and until next time, bye. 

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About the Author

Owner of Annette & Co. - Chartered Accountants & Certified Profit First Professionals. Helping online service-based entrepreneurs find clarity in their numbers, increase wealth and have more money in their pockets.

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