How to strategically increase your prices?
With the recent economic crisis around the world, every business owner is scrambling to increase prices of their products or services, having no idea how to do so. Been there, done that and learned a lot!
3 guidelines can help you communicate the change.
Be clear that the price increase is not just to pad profits, clarify the reason and as much as possible relate it to increased costs.
Make sure you are communicating the value of your work/product - If you charging more than your competitors, why is your work better.
Provide a formal, written, personalized individual letter/email to all customers and not an email blast. Remember this is another important touch point with your customers.
Suddenly increasing prices on your clients and customers can cause distrust and loss of client/customer. But being transparent is what will help you transition better in front of your audience. I always recommend businesses to be reasonable not ridiculous. The prices should reflect your costs, times, effort and the value you are providing. Not a ridiculous number that scares away prospect clients and a number you are fearful of talking about. As business owners we are although expected to explain our prices, but are not obliged to. After calculating costs and final prices - decide a number that you can charge confidently.
Let me be transparent with you. When I started my business, the market prices were and still are ranging from $5K-$10K for branding and website design services. I could have just followed that price point but I didn’t. Why? Who doesn’t like to make money, everyone duh. But I started with something that was reasonable, that reflected my experience and my expertise. A price that would help me not only attract clients but also help me build my portfolio. That is exactly what happened. I was able attract clients with my work and increase conversions because of my pricing.
Concluding to the point that increasing prices is not a crime, but done over time and strategically is what plays an important role!
