The Number One Secret of Raising Fees That Will Transform Your Business

Many entrepreneurs shy away from raising their fees, believing it will turn off their clients. However, they don’t know the secret behind it or the transformative power of correct pricing.

When talking about raising profits in your business, one idea is sure to come up constantly:

If you want bigger profits, you should raise your fees.

But let’s face it. That’s easier said than done in many cases.

One example that comes to mind immediately is Jarrett and her nonprofit work.

You see, Jarrett has dedicated most of her career to the nonprofit sector. She was involved both personally and professionally, wanting to become a role model for philanthropy and community service.

Yet, these noble intentions imposed certain limiting beliefs that Jarrett had to overcome.

Since she was entirely devoted to the nonprofit sector and its culture, she was wary about raising her fees. Furthermore, she had trouble teaching nonprofits how to become more business-like.

This was Jarrett’s state when she and I met.

Together, we managed to create a complete shift in her services… and it happened practically overnight.

Jarrett was able to reconstruct her service and revise her pricing.

Initially, this produced a bit of a scare because she stopped working with 90% of her clients as a result. But the situation started changing for the better almost immediately.

With a new, clearly defined offer, Jarrett started getting new clients who resonated with her service line. Soon, her business was competitive again. What’s even better is that her clients were providing very favorable feedback.

It’s true that raising your fees might seem like a daunting decision. But as Jarrett’s story showed us, in some cases, it's the only right way to go.

And this article will help you determine whether you need to raise your fees and uncover a secret that will dictate this decision.

Indicators That You Might Need to Raise Your Fees

Entrepreneurs might have plenty of questions about the subject when it comes to raising fees. And as we’ve seen in Jarrett's case, working within a community-oriented sector can prevent people from adjusting their pricing.

Now, you might be so focused on bringing good into the world that the thought of raising your fees might be far from your mind. However, one principle is always true, regardless of your space:

You need an audience you can resonate with, and you have to find the ideal clients for your service.

The reality is that this is closely connected to your pricing. The fees you set will determine many aspects, from your work scope to the quality of clients you’re dealing with.

This, of course, doesn’t mean that clients who pay less are of lower quality. Instead, a higher fee requires greater dedication, both from your perspective and the client’s.

So, if you find yourself overwhelmed with work while struggling financially or surrounded by clients who aren’t the right fit, it can be a clear indicator that you need to adjust your fees.

It Takes Courage

I've mentioned that fee raises can be daunting. This is true even when your circumstances become pretty severe.

Jarrett was in that very situation.

She grew up in a family of entrepreneurs, experiencing the financial roller coaster from an early age. And ten years before we started working together, Jarrett found herself on that same, familiar ride.

Unfortunately, Jarrett hit an all-time financial low. And it influenced every facet of her life, from business clarity to self-confidence. Yet, making a decision to raise her fees was still a challenge.

This is a common occurrence with entrepreneurs.

It’s a psychological block that comes from fear. People get scared that they’ll lose even the little business they have if they raise fees. And this fear grows so strong that it prevents them from taking the step even when it seems necessary to do so.

Undoubtedly, it takes courage to raise your fees. However, taking that step can do plenty to improve your business not only financially but in other aspects, too.

For instance, having overly-accessible fees can hurt your authority on the market. And if your authority falters, you can get into a situation where you can’t help your business or your clients.

This leads directly into the secret about fees:

Everyone's better off with a reasonably expensive service than a cheap one.

The Secret – Being Reasonably Expensive Is Better

The big secret about pricing can be boiled down to a simple principle:

People often perceive value through pricing.

This principle sounds very straightforward in words but can seem counter-intuitive in practice.

As I've stated, losing clients due to higher fees is a primary concern of most entrepreneurs. It seems logical to assume that people will be more attracted to a cheaper offer.

But the pricing isn’t ultimately what attracts new clients. Rather, it’s your authority and the trust you build.

In fact, many clients might find a low fee suspicious. When they see a low fee, they immediately assume that the product is of low quality.

This, of course, doesn’t mean your fees should suddenly become outrageously high. That kind of pricing can be just as big of a deterrent.

So, the best way to go is precisely what you’ve read in the title of this section. Being reasonably expensive will create an impression of authority while communicating that you value your work.

Furthermore, that pricing model will attract clients who mean business. It’s because people who are willing to pay extra for a service are those who really need it and know what they want.

By raising your fees, you can generate more business and satisfied customers. This will boost your income while building your authority and social proof.

In the end, the fee raise will benefit everyone.

Value Your Service and Price by Value

Overcoming the fear of raising your fees isn't just helpful and profitable. In many cases, it's an absolute necessity.

If you can adjust your pricing according to the value you can provide, your situation will quickly turn for the better.

It’s true that it will take some courage to do this. But you now know there’s good reason to be courageous about it.