How do you know when it’s time to raise your fees? Well if you are an entrepreneur, and you are reading this article, then I am going to be so bold as to guess that you DO need to raise your fees, and that you probably know this intuitively. Yet most likely are holding back due to doubt or fear.
Here are 7 signs that let you know if it’s time to raise your fees!
1.Little To No Price Resistance
This one should be obvious. If you are getting a “Yes” to more than 85% of your offers, and are not getting price objections on the clients that don’t close, you are priced way too low. You could easily raise your fees 15-20%, and even if you lost a couple of clients in the process you would still be earning more.
Do you really want to be known as the cheapest deal in town?
2. Too Much Price Resistance
When pricing you need to have a “money to market match” – ie: you won’t find Louis Vuitton at Walmart – and it’s possible you and who you are marketing to, are out of sync.
If your services are truly high end and provide a lot of value, then you may be trying to position yourself as a high end brand with the wrong market, but yet your fees aren’t high enough for your ideal market take you seriously, if they even know you exist.
Take for example one of my favorite designers, Max Azria:
He has two distinct brands with different price points – BCBGMaxAzria and Herve Leger. An average dress price at BCBG is $300 and and average dress at Herve Leger is $1500 and up. If he tried to sell the Herve Leger pieces in BCBG stores priced at $800, it likely wouldn’t do very well. Why?
- While BCBG is a mid-market brand, pricing a dress at $800 is still beyond the grasp of that market.
- The product is hidden from its true high end buyers, and if by chance they did see it, priced as such, mixed in with a lower end brand, they wouldn’t take it seriously as a high end brand.
And so, he has two different stores, one that does a lot more volume, and provides accessibility to many, and can be found in many malls. And the Herve Leger stores are extremely upscale, in select and high end shopping districts, and very exclusive. By careful positioning and packaging, he is able to have a larger reach, which ultimately leads to a profitable business.
This is definitely an area where a few factors are at play, if you are getting a lot of price resistance, get some help with your positioning, packaging and mindset.3. You Haven’t Raised Your Fees In At Least 6 Months
If it’s been more than 6 months since your last price increase, it’s time to take a look at what you are charging, what you are offering, and what value you are providing, and implement a plan to get those fees up to where they should be!
4. Your clients are demanding, high maintenance, and treat you like an employee, rather than a trusted advisor
The less people invest in something, the less they respect and appreciate it, and that includes your services. If you have clients that are causing you a lot of grief, wanting more than what was agreed upon, and don’t respect your boundaries, you aren’t charging them at a level they respect, and therefore, unfortunately, they are showing that by not respecting you.
5. You are starting to feel resentful towards your clients.
If you find yourself feeling resentful because you know your clients are getting a lot of value and yet you aren’t being properly compensated, it is clearly a sign that you need to charge more. You went into business because you found your passion, and nothing will burn you out faster than feeling resentful about delivering your gifts.
6. You are working too many hours for not enough money
If you are working around the clock, taking on as many clients as you can squeeze in, and perhaps even taking on clients you’d rather not work with, just to be able to have a half decent living, then you guessed, it’s time to raise your fees.
The belief that to make more money you just need to work harder, is old and antiquated.
To make more money you need to deliver stellar results, and you cannot do that if you are stretched too thin, and working at or past capacity. Working harder, actually costs you money.
7. You are not making your financial goals.
I saved the best for last. If you are not meeting your financial goals, it’s time to have a full overhaul of your business. There usually are a lot of contributing factors that are well beyond the scope of this article. I will usually do an in depth analysis with my clients and we get to work on the areas where they would see the most impact. And pricing is usually the most obvious, and the first step. I find most need to increase their prices by as much as 50%.
Yes I know I need to raise my prices – but how do I do it?
It takes a lot of courage to raise your fees, and if you know it’s time for you to do so, and would like some help with how to begin, I’d love to help you. Please reach out for a complimentary Profit Breakthrough Session, and I will help you Charge What You Are Worth and Get It ®!
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