I’ve recently had some strategy calls with clients about their pricing. Pricing is tough for small service businesses because it’s often wrapped up in money mindset issues- both our own mindsets and our perception of our clients’ money mindsets.
Right now, we’re seeing prices go up at the gas pump, the grocery store, and elsewhere. Is it time to raise your prices? And if so, by how much? Here are some questions to consider as you decide whether or not to increase your prices, and by how much.
First off, do some research and run your numbers. What are competitors charging? What is your capacity? What will you net at different price points? How much excess capacity do you have?
Next, what is your brand promise to your clients? Are you offering high-end services at high-end prices? Are you the high-value/lower-cost option?
Is most of your business from returning clients? or new clients? Returning clients will notice a price increase, new clients will never know your old prices.
How will you increase your prices and/or change your offering? Will you add a lower-priced option for those who don’t want to pay more? Will you grandfather in old clients until a later date? Will you post or send an announcement? Will you pre-sell packages at the current rate as an option for those who want to delay the impact of your price increase?
Managing a price increase requires thinking about both the quantitative pieces of the equation and the qualitative/ consumer-behavior pieces. On top of it all, the background loop, while we’re doing all this thinking, is our own money story and hang-ups.
If you want to get out of your own head and have a strategy conversation about your pricing, I’m offering a single strategy session option