Inevitably the biggest challenge you will ever get for raising your prices will not be from your clients, but will come from you. You will fear losing your clients, even if the price increase you are considering brings you up to prices that are comparable to your competitors.
That fear is normal. But the reality is you will rarely lose clients when you increase your prices. After all if you lose a client over prices, they are price shoppers… and is that really they client that you want.
Sometimes that fear is insurmountable without some strategy, keeping entrepreneurs stuck in a bad pricing model. If that is your situation, use the “More For Me” pricing increase strategy:
1. Tell your best client that you company is growing and bringing on new people (contractors, employees, part time, full time, it really doesn’t matter… you just need to explain that you are growing).
2. Tell them that you and/or your key employees will be continuing to do really the high end stuff, and that you need to charge a premium for that time.
3. Tell them that some clients like working with you (and/or your best employees) so much that they have requested to continue working with you exclusively and understand that as a result can’t do other high-end stuff for clients.
4. Then say to make it fair for you (and all your clients), that you are charging your premium rate for all work.
5. Tell the prospect that your other clients have no problem with this and you wanted to make it available to them if they are interested.
Don’t say another word and see what they say.
If they won’t proceed with the higher price and will seek the services of another firm, you can explain that is exactly what you are making available through your new people. Conversely if they say they are ok with the higher price to continue working with you and/or your best employees you have achieved what you want.
Either way you keep the client and aren’t at much risk of losing them during your price increase.