In my work I get a lot of questions about pricing -- about setting prices, about raising prices, about communicating about prices. Which really shouldn't be surprising, since as everybody knows: I am obsessed with pricing.
It occurs to me that some of these questions I hear are questions you may also have. Questions like:
How do I raise my prices if an increase is long-overdue and I don't want to alienate anybody?
How much should I look at my competition when I'm setting my prices?
How do I gradually raise my prices or do I just Beyonce that shit and do it?
So I thought I'd just lay out some answers here, to make it accessible to more people, and to cut down on the numbers of times (oh hah, as if) that I say this to people. It's pretty simple, really.
In virtually every case, the answer to questions about Pricing is YES.
Also, it's true that in every case, there is generally more than one right answer. The trick with pricing is that there is no goddess/god/guru on high ready to just give you the answer. You actually get to figure this out on your own, which is why starting from YES is particularly valuable. Our tendency is to block ourselves, come up with excuses, rationales, reasons -- code for "No" -- when we're pricing. I challenge you to lead with YES.
How do I increase my prices when it's been a really long time and what if it alienates people? YES, increase them and YES, you may lose people. But guess what? Losing people HAPPENS. It's not the end of the world. The good news: there are other people. A lot of times parting ways with some clients, particularly clients you've had for a long time at a low price point, allows you to welcome in new clients who are more appropriate to where you are in your business right now. And for whom this new price is just biz as usual.
How do I tell people about this price increase? YES. Tell them. Use every means at your disposal, communicate early and often, in your newsletter, in your emails to clients, in your calls and conversations. Talk about it. Tell them. Sure, it may not be comfortable at first, but practice makes everything easier.
How do I respond if people balk or push back? YES. Some people may balk or push back. Which doesn't mean that there is anything whatsoever wrong with the new price you're articulating. It's OK for people to have reactions. Really! But it doesn't mean you need to budge. Unless you really want to. Unless for some reason it serves you to grandfather/mother in some of your older clients, stepping up their price increase over time, or extending them a nominal percentage discount as a Thank You for their loyalty. You can decide you want to have tiers -- old clients (whom you're possibly phasing out) at the old price, new clients (a population you're actively growing) at the new. Or not. Up to you. And also: it's OK to let people go.
How much do I look at my competition when I set my prices? How do I set prices if I don't really have any competition? YES and YES. Look at your competition as a way to have a sense of what's out there, but don't let that create a false ceiling for your pricing. And if you have no competition that you know of, YES, you get to lead the field!
Do I just Beyonce that shit and do it? YES, go on and Bey that price increase. There are SO many ways to talk about price increases, to tell that particular story. Do. It.
What if it doesn't work? YES. That's a possibility. But here's the thing: how will you know if you don't try? Are you sure people saying NO is really about the dollars in question? Have you made your case as well as possible? Do you need to be talking to altogether different people? Go back and ask the people who've said No why they said No. Learn from that. Integrate that. Adjust as needed. Pick up. Move on.
Please don't let fear of No stop you from raising your prices to where they need to be. As a rule, most humans resist change, right? But that doesn't make change wrong, now does it?
As you consider raising your prices, start from YES and see what happens. YES, you might be nervous. YES, people might resist. YES, do it anyway.
Pricing is, for many people, the single scariest part of having a business. Because honestly, a lot of times in pricing it really seems as though we are just making it up as we go along. We're doing the best we can to base our prices on something, but that something is mostly subjective, even when it has a solid numerical foundation.