Someone recently asked a really awesome question on my Facebook page:
“Was there something specific that gave you the confidence to crank your rates up? Was it list size? Community engagement? Or something that gave you the sign to go big? I’m not sure what to look for.”
I got excited about this one. Raising rates is a fun topic because everyone has opinions about it and at the same time, we all struggle with knowing when it’s the right time.
I coach almost every client through the rate-raising process, and have helped colleagues and friends do the same. I’ve even nudged people I hire to make sure they’re getting paid what they’re worth! The quick answer to her question: It’s usually a hunch, paired with calculated action. I’ll get to that in a minute.
Why You’re Avoiding It
Raising prices can be the most nerve-wracking thing for a business owner. Sure, we started our own businesses specifically to be in control of everything. But when it comes time to pull the trigger on what we charge, a lot of us balk.
People won’t pay that!
My clients will leave me!
I can’t charge more than the person who trained me!
I’ve heard them all. And to be honest, I’m calling your BS right now.
Sure, deciding on new rates that make both you and your people happy can seem like a lose-lose proposition. But it’s not, as long as you know what to look for.
There are the five big signs that indicate it’s time to raise your rates. They have been my beacon for rate increases, and have helped my clients do the same. And I’ve laid them all out for you right here.
Think it’s time to raise your rates? How to know for sure.
Sign #1: You’ve got a hunch it’s time.
When you know, you know. Y’know?
Check in with yourself. For a moment, set aside the painful thoughts like, “Will people pay this?” and “Am I worth it?” Just for a moment.
When you drop those ugly thoughts and think about charging more, how does it feel?
Exciting? Exhilarating? A little scary, but the good kind of scary?
If underneath all of the doubts and fears is a calm and centered certainty, you’re on the right track. These are all signs it’s time to do it.
Sign #2: You feel a little resentful of clients taking up your time.
It’s 11 am, and you’re totally focused on crafting your latest masterful blog post. Then, an email pops into your inbox. It’s a client with an emergency. Could you puh-lease look over this, she begs, or hop on the phone to discuss that? Just for 5 minutes?
You and the client both know it’s never just 5 minutes. So how do you react?
Do you fight the urge to send back a snappy email? Are you overcome with the desire to ignore her? Did the phrase, “I don’t get paid enough for this nonsense!” pop into your head?
Swoosh – hear that red flag flapping around in the breeze? Resistance and resentment mean you’re not getting paid enough. You’re smart enough to know that letting resentment build with your clients is never a good idea. But most people don’t realize it’s also a sign that it’s time to charge more.
My philosophy – which I’ll touch on more next week – is to charge whatever makes you want to go above and beyond for your clients. Basically, whatever price does the opposite of creating resentment. Charge what you need to to feel compelled to serve your clients well. (Which doesn’t necessarily mean letting them trample your boundaries either; but that’s a topic for another time.)
Sign #3: You’re offers are solution-focused, not time-based.
If you’ve moved from people “buying your time” in a dollars-per-hour model to solution-based offers, it’s likely time to also increase your rates.
If you’re a health coach, you’re more than just a cheerleader chanting, “Eat more greens!” You’re helping people fix their health problems. If you’re a career coach, you’re not just talking with clients about their job complaints; you’re helping them track down the career they’ve always dreamed about.
Are your services delivering on those solutions? If so, that’s a stunningly valuable result… not to mention a sign it’s time to start charging what your skills are worth! People pay WAY MORE for results than for your time. How much is it worth to someone to solve their ______ problem? Quite possibly more than you’re charging!
Sign #4: You have a waiting list, and people keep hiring you.
This one might seem obvious, but many entrepreneurs don’t realize that the value of a waiting list goes beyond just the ease of knowing you’re not pressed for new clients. A waiting list means there’s a line out the door of people hankering for your services!
And a line out the door means you’re great at what you do.
And being that good, you guessed it, means it’s probably time to raise your rates! (And no, that doesn’t mean people will leave! Oddly enough, the opposite often happens, which I’ll touch on more next week.)
Which brings us to the most transparent sign of all:
Sign #5: Your clients tell you you’re not charging enough.
If this happens to you, that’s a big “UH, HELLO!” from the universe.
When the people who pay you say you’re undercharging, it’s one of the most wonderful affirmations you can get. It’s also a sure sign your people will stay with you through the price hike, because they value you and what you bring to the table. (Though I strongly recommend not waiting to get to this point to raise your rates, because it will mean you’ve been undercharging for way too long!)
My friend, a massage therapist with a booming business she’s built exclusively on word-of-mouth referrals, was getting 25% tips (and larger) from all of her clients for over 6 months before she caught on: she wasn’t charging what she was worth. When she raised her rates, they all told her, “It’s about time!” and gladly paid her higher prices.
Everyone deserves to get paid what they’re worth. And often, you have to be the one to declare it! Tweet that!
Now, as always, I want to hear from you! Tell me…
When is the last time you raised your rates? How did you know it was time?
If it’s been awhile since you hiked your prices, is it time to make the jump again? Do you need to change anything about what you offer, or how you offer it before you can raise your rates?
Do you have any other tips, tricks, suggestions, or stories that would help everyone else who’s reading?
Let’s talk about it in the comments below. I can’t wait to hear what you’ve got to share!