Does Putting Your Prices Up Fill You With Dread?

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At this time of year I always find myself talking to a lot of people about their prices.

There’s a natural trend within all the new-year target setting for people to decide that the time has come to charge what they’re truly worth instead of underselling themselves. Price is a hugely emotive issue though, and that makes it very difficult to be objective about it when it comes to your own business. You may well know that you’re undercharging but still have a mountain of doubts about putting your prices up. Many people worry over questions like:

Will people think I’m worth the new prices?

Will customers really be willing to pay that much?

Will we lose half our customers?

Is it better just to play safe and stay as we are?

Now it’s really easy for me to tell you that when you put your prices up you may well lose some customers, but those will be the penny-pinching nit-pickers who don’t really appreciate your value anyway. And that you’ll quickly replace those customers with much more discerning ones who will be much better for your business in the long run. After almost 10 years of coaching businesses I can confidently tell you that, as long as you’re not hiking your prices ridiculously, then this will almost certainly be the outcome. But that doesn’t necessarily stop the doubts going through your mind does it?

So to help you with that here are some key steps to help you increase your prices painlessly.

The lowest risk and least stressful way you can increase your price is to do it gradually and to focus on new customers first. As they’re not currently paying you they’re much less price sensitive than your existing customers. They’ll also help you gain a better understanding of what the marketplace really thinks of your price.

If a price rise really does scare the pants off you, then nudge the price up each time you gain a new customer. And watch how many times you can do this before you get some prices resistance. That’s usually a revelation!

Also, look for your least price-sensitive product or service and increase that one first. Think of this like a supermarket trip – there are certain standard items you buy every week for which you’ve probably got a pretty fairly good idea of the price. But there are other things that go into your basket that you just buy without paying attention to the price. We all do that!

So which of your own services are customers likely to be less aware of the price for? Which is the least typical or the one they’re least likely to have bought numerous times in the past? For that kind of service you may well find that customers have an incredibly vague idea of the price so their resistance to an increase will be minimal.

And some final pointers for you to keep in mind whenever you’re looking at your own prices:

If nobody ever tells you you’re too expensive then you’re definitely too cheap! Around 30% of buyers will buy on price alone so you should be getting some price push-back from those people. That’s only natural. Not getting any resistance? You’re way too cheap!

Be aware that being too cheap will often lose you as much business as it wins. Think about it … if we see a price that we think is much cheaper than it should be our natural instinct is to think the product can’t be any good. Low price suggests low quality!

And finally, don’t confuse being busy for being profitable. If you’re working every hour God sends but there still isn’t enough money left at the end of the month then you have to look at your pricing or you have to find a way to work far fewer hours. Don’t get stuck in the trap of thinking business is going great because you’re run off your feet. Focus on the numbers, not the hours!

If reading this sounds really familiar and you know that you need some outside input to give you the confidence or the clarity to push on with this, don’t keep struggling, get in touch and we can book in some time to talk this through and come up with the right plan for you.

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