This is the final in a series of four articles about getting paid more money for your professional services.
In recent weeks I’ve talked about money beliefs that may be holding you back, knowing what your true value is, and how to use bonuses to increase your sales
Today I’m going to address a simple but also complex topic: How to increase your prices.
If raising your prices was easy, everyone would be charging what they’re worth, usually charging more than they’re charging now.
We don’t raise our fees because we worry we’ll lose a project, if not all our clients, if we charge too much.
So we hesitate to make the price-raising move.
I’ve gone through the same hesitation many times and have also had numerous breakthroughs in this area.
• In my early days in business, I tripled my income in a couple months by simply increasing the minimum number of sessions clients could work with me from three to ten.
• When I created my group Marketing Mastery Program, I charged participants $1150 per month for the program and didn’t have a problem filling it (much to my initial surprise).
• And in my individual Marketing Coaching Program, I’ve more than doubled my fees over the past two years. Last week someone was surprised my fees were so reasonable, so I guess I’m still not overcharging!
We’ll really never know what clients are willing to pay for our professional services until we start raising our prices and discover for ourselves.
Yes, there is a risk to raising your fees, but it’s a risk worth taking. If you charge more than the market can bear, you can always back off a little.
The additional bonus to charging higher fees is that you will tend to attract a higher level of clients, ones who are more committed to getting results and who are often easier and more fun to work with.
If you’re ready to give price-raising a go, here are some things you can try.
1. Increase your prices incrementally. Let’s say you’re charging $250 per month for professional coaching.
For new clients, raise your fees by just 10% ($25 in this case) and keep raising them by about that amount every other month.
In a year your fee will be $443 per month. You’ve given yourself a raise of 77%. Try to get that in a job!
A close friend of mine (who became a client) started his coaching practice at $25 per hour in the early ’90s. He raised his fees incrementally over the years and now charges $2,500 per month. That works out to $625 per hour-long session. That’s a 25X increase.
He went from relative poverty to buying an $800K home in L.A. and now he consistently makes about $250K per year.
2. Increase the size of your service package. As I mentioned above, I more than tripled the minimum number of hours I offered to clients.
I have a new client whose service package is too small to produce the results his clients are looking for. Guess what we’re going to work on first?
Of course, you could increase the size of your service package incrementally as well.
You might also switch from hourly coaching or consulting to offering a “solution-based package.”
I had a client who was a management advisor to banks. He used to sell consulting by the hour. Then he switched to large packaged programs to thoroughly train new bankers at $10,000 each, increasing his income dramatically.
3. Offer tiered pricing for different lengths of service. In other words, the longer your contract, the lower the fees.
I once worked with a business coach who offered month-to-month coaching for $700 per month. But for a one-year contract, he charged $500 per month.
Now, this might seem like you’d be lowering your prices if you did this. Not so, as $500 per month would be your previous fee for month-to-month coaching.
So, if you got a new month-to-month client, the fees would now be $200 more per month. And if you got a one-year client (at $500 per month) you’d be working several months longer with the average client.
In either case, you’d get paid more.
4. Shift the way you think about your fees. Doing all of the above will be impossible if you’re still thinking you are only worth a certain amount or that your clients can’t afford more.
The thing is, you don’t really know until you raise your prices, so you’re caught in a double bind.
Here’s a fun and simple exercise you can use when you want to raise your prices but feel unsure.
Say you want to raise your fees from $100 to $150 per hour, a $50 increase.
Then practice this script out loud a number of times.
“How much is your hourly fee?”
“Oh, it’s just $200 per hour.”
Keep doing this until the $200 per hour fees sounds reasonable.
And then when the next client asks for your fees, you’ll say, “$150 per hour,” and it will sound more than reasonable, perhaps even low.
I’ve known people who did this exercise who ultimately went to the higher fee as they’d convinced themselves it was very reasonable.
If it’s time to raise your prices and you’ve been putting it off, try these simple tips and see what happens.
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