One of the first questions I ask clients (and myself) is how do you plan to grow your business? As business owners and Internet-based entrepreneurs, we’re always creating better offerings, laser focusing on our ideal client type, tweaking our product line, basically doing what needs to be done to grow our business and increase our profit margin. Yet one of the simplest and fastest ways to increase your bottom line is … Raise your prices. And rarely is that ever given as an answer to the growth question.
I think it’s because there’s a certain fear factor when it comes to upping a price. Will my sales plummet? Will I lose clients? Will I make people angry?
The truth is yes, you might lose some sales, some clients, or make some people angry. But as we all know, that tends to happen anyway in the general course of business (though we all strive to keep our customers and clients as happy as humanly possible, of course). And the potential increase in profit should not only cover those small losses but still net you profit growth.
Here are some questions to ask yourself if you’re thinking about raising your rates:
- When was your last increase? Has it been over two years?
- Do you have enough sales / clients to cover the loss of a few over an increase?
- Are you able to justify the increase to yourself?
Now that last one always gets me strange looks but honestly, if you are not fully on board and standing proud behind your product or service, how do you expect to justify an increase to others?
Okay let’s say it’s been over two years since your last price increase, you have a large enough client base to weather a few lost sales or clients, and you have faith that even with an increase the product or service you offer is still a value to your clients. How do you go about raising your rates / prices?
- Research and define your increase – pick one product or service – research the competition – determine the amount of your increase – do the legwork. Once you’re comfortable with your decision …
- Institute the price increase – make sure you get it changed everywhere. I’ve lost count of the number of times a random old sales page or link gets found by a client that I don’t even remember having.
- Monitor the change closely. Tweak it as needed. Rinse and repeat. Roll it out to other products or services gradually.
Congratulations! You’ve just successfully increased your rate or price, and your bottom line will thank you. Let us know how your increase went or contact us for help implementing your raise. We’d love to hear from you!
Until next time … to your success!
Paige Jackson
Create 2 Sell