Today I coached 2 clients on raising prices. My first client raised his minimum fee by 65% and signed up his first client at the new fee. This new client is also now his highest paying customer. This was perfect as his fee structure was a recipe for struggling and hustling.
My other client has created an amazing business opportunity in the Middle East consumer market and was ready to charge corporate clients a tiny fee to enter. This was confidence pricing to get the first few clients in which made sense, however generally the fees were low. After a few conversations with her potential clients she finally started to see the value of her opportunity and raised her fees.
Many people are afraid to raise their fees scared that they’ll lose business. If you can demonstrate the value to the customer then raising fees are not an issue. If you are in a commodity market then this is going to be a challenge.
Here are the main reasons to raise your prices
- More profit – If you have a fixed costs base, when you raise your fees by that increase goes directly to profit. Raise your prices by 5% that value goes straight to profit. How much could you raise your fees by without walking away?
- You choose your playground. – A coach firiend pointed this out to me then I noticed this to be true for other top coaches and consultants.When you work witht the best you are now in their network and they are in your network. The recommendations you get from these clients will be similar to your existing customers. if you play in the value market. Your are creating a value market and your referrals will be price seekers. If you play in the premium market your network and referrals will be premium.
- You have to continually raise your game –Charging high fees puts you in the big leagues. You may have to confront your self confidence to operate in this field but when you do your confidence and sense of self goes up. There may be some work to do but this is great.
Now let’s look at some of the reasons you may not want to raise your fees.
Why people don’t choose premium
- “I’ll have to work too hard. The last time I had a high paying client they were so fussy it wasn’t worth the misery.
You have the power to choose which clients you want to work with. If they are unreasonable, refuse to work with them again.
Avoid the Elephants.
- I don’t know if I’m worth it.
Calculate the value you give to a client. Aim to deliver 10x more value than you charge and you’ll be fine. A 5 to 1 is ok but aim for 10 and you will astound and delight your client.