You’ve finally figured out that you’re charging too little. That realisation came about because:
- You’re feeling really, REALLY resentful or burned out about how hard you work and how little money you make. It doesn’t seem worth it anymore or
- You finish an order only to realise you practically paid the customer to take it off your hands, or
- You have less money in the bank than you used to and yet you’ve got plenty of orders keeping you busy, or
- Your last 10 quotes have all been accepted with no argument, a few of people even said they were surprised at how inexpensive it was.
You KNOW you should increase your prices, but you’re really worried that:
- You’ll have no business left because everyone will run for it when they see you’re more expensive now,
- You’ll anger the clients who have been with you for a long time who expect a certain price point,
- Secretly, you don’t think your work is worth charging more for (you imposter you!), and
- You’re not “about the money,” so you think you could or should charge more, but you don’t want to be greedy or for other people to think you’re greedy.
So how do you manage all of these worries going around and around in your head? First, I’ll give you a step-by-step method for increasing your prices, and second, I’ll teach you how to deal with those worries.
To raise your prices:
- Determine how much you’re going to raise them by. I’d suggest no more than 20% to begin with – more than that and it gets hard to explain why the jump is so big.
- Pick a date on which the new prices will be effective – no more than a month into the future.
- Announce it professionally and succinctly by putting a notice in your store, on your FB page or in your newsletter. Don’t rant. Keep it super simple: “We are grateful for your patronage – please note, prices will be increasing on June 1, 2016.” Optional: Invite people to place orders or deposits BEFORE the price rise comes into effect so they can “take advantage” of the current pricing. This is a great way to harness the power of a price rise and lock in the people who have been sitting on the fence.
- On the date you picked, ensure that the places which list your prices (website, social media, in store) are all updated. Then take the sign down. You can leave “signs” like IG posts or FB posts, just don’t have them pinned at the top anymore.
- Put a note in your calendar to check your pricing again within 3 months and again at 6 months so you’re reviewing it regularly rather than waiting for items 1-4 (as above) to happen.
- Bookmark this post so you remember to come back to it when you decide to raise your prices again.
To deal with the worries:
- Accept that you will probably lose a few customers at first. No big deal because you’ll be making that money up with everyone else who is now paying more, and most of the time your orders will come back up again in a short amount of time.
- Have an answer for your loyal clients. Again, not a rant – just an explanation. “I’ve been in business 3 years and never increased my prices,” “My new prices reflect my improved skill level,” and so on. Whatever you say, keep it short and sweet. If you really want to be super nice to very loyal customers, offer them a nice bonus for their loyalty – free delivery within X miles, free candles, etc. Something small but a nice recognition of their loyalty. Realise that some people are only loyal to price and some people will no longer be able to afford you – no big deal on either. It’s not your job to pander to their cheapness or sacrifice your livelihood because of their financial situation (harsh but true.)
- Imposter syndrome is totally a thing – you can Google it – but basically, we all feel like a sham at some point. We’re not. Fact is if people could make these products themselves, they would. They don’t and can’t, so we get the order. They need us, they pay us, if we were true imposters we’d have no business. End story.
- Don’t get me started on the whole “not about the money,” thing – that my lovely is a long-held mental money block. Me, I’m about the money AND the heart. Greed shmeed, I love money because it pays my bills and feeds my kids. I also love my clients and my business – and being able to support my family therefore MAKES ME ABLE to provide to my clients. *mic drop*
Above all, remember this – increasing your prices does not make you greedy, demanding or unreasonable. It’s just how sales work. Every business in the world (from huge multinationals to tiny Mom and Pop corner stores) needs to raise their prices at some point, if nothing else to keep in line with inflation. There’s a reason why a loaf of bread in 1976 cost $0.87 and now it’s more like $3.87. Sure, you might come across some angry person who gets annoyed at your prices or has a tantrum but we’ve all done that too – when the price of gas goes up, imagine how much abuse the guys who work there get?!
You can raise your prices in a way which is professional and reasonable without there being some big emotional moment around it. Business is business EVEN WHEN it’s done with heart.