#9  Raise Your Prices

In my experience, and almost without exception, entrepreneurs I speak to or work with have under priced their services. One of the keys to raising prices is to feel confident about the expertise and value you deliver to your customer. This comes with uncovering, owning, leveraging and marketing your assets-experience, connections, expertise, education, training, resources, brand--so that you are set apart from the competition. It doesn't matter whether you're just starting out, or have been in business for several years, it's the quality of the product or service you deliver, not tenure in your business.
 
There are many ways to increase your pricing and most will elicit little, if any, major adverse reactions from the "right" customer. Below are just a few examples of those ways.

Own Your Value, Charge for Your Value

How you price your product or service is directly related to how you value yourself, your knowledge, your expertise and your contribution to your client.
 
As women, we often take for granted just how much we know. When I work with a client, I always uncover knowledge and expertise that the client has either dismissed as irrelevant, didn't realize she was using in her business, forgot she had, or thought of as "it's just what I do."  Not leveraging or ignoring your assets-skills, experience, knowledge, education, training-is like throwing money out the window. The greater your inventory of assets, the more you can charge. But you need to uncover, acknowledge, own, leverage and market them to do so.
 
In addition to working with a consultant to identify your assets and value, tap into clients, vendors and partners. Ask them what they feel your greatest assets and skills are and what they most value about working with you. Leverage that in your marketing and your offering.
 

Raise Your Prices

Here are a five situations in which raising your prices is a no-brainer:
 

1. If you've never lost business because of your pricing. If this is the case for you, then it's time to raise your prices. Raise them to the point where you start to lose jobs. (Yes, you read that right!) As a business owner, your job isn't to provide a product or service to everyone who needs it. Your job is to offer a great product or service and sell it to those who can afford it so you can generate revenue, pay your bills, reinvest in your business, and create the life you want.
2. If you're a relatively new business and your sales are flat or diminishing anyway.  If you're still new (or for that matter even if you're a couple years old), and you're not generating significant income, raise your prices. The odds are no one is going to notice anyway. If you're new and feel that's why your prices should be lower, you're wrong. What matters is the quality of product or service you offer, and your value to the customer, not the length of time you've been in business.
3. If you're in a crowded market and you're priced in the mid to lower end of the market.   Let's say, for example, you're in coaching, accounting or financial services and your rates are highly competitive with similar businesses. Consider raising your prices to separate yourself from the pack. Don't you find that you're typically more interested in the provider who is higher priced? A universal truth in the psychology of pricing is price=perception. Higher rates=higher quality product or service.  
4. If you repeatedly hear customers make comments like: "Wow, I didn't expect to get so much X (information, value, service, advice, work, etc.) for what I paid." Or, "You gave me so much more than what I expected."  If clients are always telling you how much you give them (a.k.a., giving away), raise your prices. Believe me, if you're giving your clients that much value, they'll continue to buy your product or use your services.
5. If you're targeting corporate clients, but charging like a new or small business. Corporations have larger budgets for such services as executive coaching, sales or technology training, business consulting, or communications programs, for example. It's critical you charge accordingly. Lowball pricing can be a red flag causing the prospect to think your product/service can't be of much value. If you're playing in the big leagues, price for them.

 

Refine Your Offer

When I started out, my service offering was huge which, frankly, gave me a lot of anxiety (how was I going to provide all this and be good at it?).
 
By listening to clients, strategic partners, and friends much light was shed on what they experienced as my strengths and value. When someone mentioned that my process really empowered clients and quickly led them to a greater revenue generating position, I knew she was right and that this would be invaluable to the right customer. I wanted clients who knew time lost meant money lost, and that money wisely invested in their business would have a good return.
 
What came of that conversation is what I have today-a much more refined offer primarily focusing on service businesses. I also increased my hourly rate by 60% while increasing my client base.
 

Repackage Your Offer

Most businesses offer services that can be broken down into individual services or bundled to create a more enhanced offering. By breaking down an existing bundled product or service, you can charge higher prices for the individual components or services. Conversely, by bundling, you can create different levels of offerings such as a "Premium Package."
 
The value of offering packaging (consequently pricing) options is to appeal to a broader array of clients and their diverse needs and to cross- and up-sell your product or service. One client may be ready, willing and able to pay for the bundled platinum product today. Another client may not have the resources (time or money) to commit to a full packaged solution yet, but would like to get started by buying some of your product or service in a more incremental way.
 

Leverage Your Experience

Specialists who have advance training should be charging more for their expertise. Examples of this include MD, Ph.D., JD, MA/MS/MBA, and industry specialists. If you've trained under "the" guru in your industry or field of practice you should charge more for that experience and knowledge.


I love working on pricing with clients so I want to share a few other comments about pricing and fees. If you're an Illumin client, you'll know these have become mantras.
 

Never quote a price "on the spot."

This locks you into a number even if you clearly state that number you've given is "approximate".  If you go back to the prospect with a higher quote after you've had an opportunity to scope the job, you will either have a disappointed prospect ("In our conversation you indicated it would be around $2,500 not $3,500!") or one who thinks you don't know what you're doing.

Don't Negotiate on Price.
Negotiate on the Deliverable.

If a client tells you the price is too high, ask them what their immediate needs are so you can accommodate the deliverable to those immediate needs. Scale the deliverable, not the price. You're not on sale.

Stop Giving Your Services Away.

As women, we are generous, caretakers, givers. This is often the very reason we're not making the kind of money we should or we go out of business so quickly. Our "reasons" are many: "they're a friend"; "its my husband's best friend's cousin"; "I do this in my sleep, it's no big deal"; "It doesn't take that much time"; "I'm not that busy anyway"; "I like giving back to X".  Here's the deal. Your time is money. Your expertise is what makes you money. If you're always volunteering or giving your time and expertise away, you'll be out of business quickly. At the least, you won't be making much money. If you want to give back, pick one or two causes and charge everyone else.

You can always make a monetary donation after you've earned money.  You cannot if you are out of business.