There comes a certain point in your business when you decide you need to start earning more money for your hard work.
Sure, charging low rates for your services was fine when you were just starting out and didn’t have any clients. It helped you attract customers and gain experience and testimonials to get your name out there.
But now that you’ve been in business for a while and you have a solid client base, you just can’t work for peanuts.
So, it’s time to raise your rates.
Raising your rates can be scary. You don’t know how your existing clients will react. Will they stick around and decide to pay more or go find a new service provider?
The ideal situation is that they will stick around despite your rate increase, so here are a few ways to ensure that raising your rates won’t lose you clients.
- Give Your Clients Notice
Nobody likes surprises when they’re going to cost them more money, so instead of just springing your new rates on your clients, give them plenty of notice.
A good rule of thumb is to notify your clients of your rate changes at least two appointments before the increase will happen.
If you’re in a field where appointments have long gaps between them, give your client a courtesy call so there are no surprises when they show up for their appointment.
If you feel uncomfortable phoning your client, communicate the rate change in a confirmation email when they book an appointment. Just make sure you give the client plenty of advance notice.
- Give Long Term Clients a Reduced Rate
If you have had a client for a long time, it can be very helpful to acknowledge that long-term relationship and give those special, long-term clients a reduced rate.
You don’t have to give them a reduced rate forever, but let them know that you’re happy to give the a reduced rate for their next three visits, or over the next couple of months – whatever time frame makes sense for your business.
This will greatly help with client retention, because people don’t like change. If you give them more time to get used to the change, and make them feel special by giving them a reduced rate, they’ll be far more likely to stick with you even at the higher rates.
- Give Them Their Money’s Worth
You don’t have to justify your rate increases. After all, you’re a business owner, and one of the best aspects of being your own boss is being able to give yourself a raise when you want rather than only once a year when your boss says you can have one.
But with clients you really want to keep, it can be important to make them feel as if they’re getting their money’s worth.
Your long-term clients have been paying your lower rates usually for as long as they’ve been coming to you for services. So it can seem a little unfair for them to all of a sudden be paying more. So make sure you’re giving your clients their money’s worth.
New clients won’t know the difference, but spending a little extra time and attention with your long-term clients can help them justify the extra expense in their own budgets.
- Communicate Your New Rates
Money can be a sensitive and awkward subject, so it can be our nature to want to silently raise our rates and go about our business.
But this is a mistake. In the Relational Economy, relationships are the key to a thriving business, and relationships are built on trust.
You can’t possibly build and maintain trust between yourself and your client if you aren’t communicating with them, especially on matters that will directly impact their business relationship with you.
So make sure you don’t sweep your price increases under the rug. Communicate with each of your longer-term clients to let them know that you’ve increased your rates, and that you would love for them to remain a client.
No matter how much you love what you do, passion won’t keep food on the table and the lights on in the shop. You need to earn money to support yourself and your family, and sometimes that means increasing your rates.
As much as you feel awkward doing it, it’s entirely possible to gracefully raise your rates without alienating or losing your existing clients.
And you never have to by shy about asking for more again.