What You Need to Know About Raising Fees and Pushback
You’ll never reach your financial or lifestyle goals without asking for your worth. Learn the value of charging more when the timing and reasons align.
I know many entrepreneurs struggle with raising their fees, believing it’ll do more bad than good to their business. That’s why I want to start by sharing one of my client’s experiences in this area.
A while back, Nancy was going into her first conversion event.
She wanted to move some of her old clients into her new program. Together, we looked at the fees for her new program to figure out how to make the transition.
During the event, she talked extensively about her new program. She explained that there’ll be a lot more value to the new program. And her offer was to her old clients since they already knew her and they’ll see that they’re getting a great deal.
Then, Nancy gave her clients 48 hours to say yes…
And as it turned out, 95% of them joined the new program despite a significant fee increase!
Why was Nancy successful at raising her prices while others failed?
A couple of factors aligned perfectly for her to launch a new program, starting with her not fearing that some clients might drop out.
After all, that’s every entrepreneur’s biggest fear.
Will anyone buy after I raise my prices?
The answer is a resounding yes… but only if you do it correctly.
And don’t worry. This is one area of the business you can master after understanding some key concepts.
Timing Your Pricing Adjustments
Many entrepreneurs make the mistake of arbitrarily raising their prices. While increasing fees is definitely necessary to sustain growth, it can cause problems if you don’t do it carefully.
That’s why one of the first things to consider is the timing.
Unfortunately, there are no hard and fast rules regarding timing. But you can always be more successful if you raise your prices at the end of a program as opposed to doing it in the middle of an ongoing contract, course, or program.
In Nancy’s case, she successfully raised her prices because she did it at a new program launch. After all, existing clients and new clients won’t necessarily agree to another pricing structure while they’re in the middle of their program.
And this is very important. You should always strive to maintain integrity with original agreements.
Based on this good business practice, you can determine what events or periods make sense in your business or industry to raise your fees.
In addition, you should also have a solid reason behind increasing prices. Launching a new program or product might constitute excellent timing. But if it doesn’t provide a unique solution or extra value to your clients, people might not pay the higher fee.
As for existing clients, they’ll want to see a progression in their growth and results. And if they’re happy with you so far, they’ll pay extra once you assure them that you can take them to the next
Don’t Get Flustered by Pushback
Pushback is something that entrepreneurs can experience in many areas of their business - from pricing to delivery to customer support and everything in between.
But the fear of pushback against raising fees is one of the top reasons companies don’t grow.
That’s why, in general, business owners and leaders spend too much time trying to find the Goldilocks pricing zone. By this, I mean they want it not too hot nor too cold, but just right to avoid potential pushback.
The problem with Goldilocks pricing is that it’s difficult to pinpoint. Sometimes, you can’t even find it without testing the market.
That said, if you get consistent pushback, your prices might be too high. It could be a sign you have to rethink your strategy.
In other cases, you might have too many takers. Every program is constantly booked, and you get mile-long waiting lists. While you might be delivering excellent results, chances are you could be underpricing your offer.
The takeaway here is that you can’t wait until you find your Goldilocks pricing. And the only way to identify it is to test the market.
While pushback can be frustrating, it’s perfectly normal and will give you valuable insight into how you should adjust your pricing strategy.
Pricing pushback, like negative feedback and reviews, indicates an apparent problem. And it’s your job to get creative and solve it.
But not raising prices because you don’t want to face pushback is a more critical mistake. You’ll never move the needle in your business if you stand still.
When and How to Raise Your Prices
Every business goes through different stages during its development. Understanding this is vital to figuring out when and how to raise your prices.
Now, at one point, you’ll become more aligned with the actual value that you provide to your clients. You’ll also be more confident in the results you can deliver. That could be one of the stages that warrants a pricing increase.
Other times, particularly in the earlier stages of business development, entrepreneurs equate raising fees with adding more stuff. They believe that by adding more, they can justify a pricing increase. But that’s not necessarily a good approach.
It takes time to fully know your clients and understand their problems.
A more efficient way to go about raising your prices would be to wait until you get to know your clients better.
You must remember that knowledge of your clients implies awareness of their problems.
In time, you can uncover new issues that you’re qualified to solve by implementing new and unique solutions. Perhaps you can bring in new tools, develop a new program, or bring in new experts that change your value proposition to a point where it’s worth more.
Master the Art of Raising Prices Through Practice
The worst thing you can do in your business is to avoid raising prices out of fear that no one will buy or you might run into pushback.
That said, getting some complaints about increased pricing is natural and to be expected.
But remember that your business can’t grow if you get stuck in entry-level prices. You won’t feel fulfilled if you know you’re constantly underselling your expertise.
So, work on timing your pricing increases with a better understanding of your clients’ needs, figuring out new solutions, and finding justifiable reasons.
If you can do that and avoid falling into the trap of frequent incremental increases or breaking existing agreements, you’ll get more clients to say yes to your new prices.
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