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.
My Personal Recommendation for YouHow to Overcome Your Money Hang-ups and Finally Start Charging What You’re WorthThink 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?
Excellent!
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.)
My Personal Recommendation for YouHow to Double Your Rates with IntegritySign #3: Your 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!
My Personal Recommendation for YouSteal This! My Step-by-Step Guide to Telling Your Clients You’re Raising Your RatesNow, 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!
Thank you, it’s very helpful. On this topic, it seems like I need a reminder every 6 months or so… So far, #1 and #2 apply to my situation. And maybe it’s time for me to accept that #3 is also true… (I am not a coach, I teach my own method of stress-reduction that combines sounds and movements, and people come out of my classes saying they have not felt as relaxed in months/years/ever…). Hopefully that will lead to #4! Thanks again, Jenny!
So glad it brought up the question with you again, Anna! It’s so important that we continue to value our work and charge accordingly.
All excellent points, Jenny-darling. I’ve found myself analyzing prices of many products and services lately. My immediate perception, if I’m being honest, is that more expensive= better. Interesting, isn’t it?
It’s a crazy psychological thing, isn’t it?! I know I get sucked into that as well. We all do!
I have 3 packages with 3 different rates, but I hear a lot that I can not afford it. So I try nit to take it personally and stay strong in my power because I know about the value I offer. It also shows me if someone is really commited to make changes or not. Jenny, any tipps for to my issue: I still get sad when people say no because of the money and I know I could help them solve their problems. But of course it is there choice. But it feels unsatisfied if the money is their problem.
Hi Andrea,
I had to chime in here because this is such a popular struggle and you’re so spot on. If I may offer some feedback because as a sales coach this is a HUGE struggle for my customers. First, I LOVE that you feel sad when people say no because of money because that means that you are SOLD on the value you deliver. Now of course I don’t want you to be sad BUT when someone says no because of money, you should feel disappointed because that potential customer isn’t going to get the life changing benefits of what you offer.
Next, the conversation doesn’t have to stop when the money objection is given. I have an episode of KTV that speaks to this issue. If you like you can ck it out at http://bit.ly/10q29mb. There is a way to lovingly follow up with people and get beyond the money objection with out feeling pushy. You have to remember most times the real reason people say no because of $ has NOTHING to do with money. It is about a desired outcome that they crave but are unsure if you can provide. Through Authentic Follow up you can keep the conversation moving forward to show that you can help them reach their desired outcome and turn them into a raving fan happy to click purchase. I hope this is helpful. GOOD LUCK
So glad you chimed in here, Kendrick!! “I can’t afford it” doesn’t always mean exactly what it sounds like. Like Kendrick says, it can often mean that we haven’t articulated exactly what we offer and how much our work changes lives!
In practicing follow-ups (which Kendrick taught me how to do–she’s phenomenal), you will get a feel for when “I can’t afford it” really means they can’t afford it, versus when it means “I don’t think it’s worth it.” It’s a fine line, but it makes a difference.
Check in with your gut. It’s amazing how it generally knows if it’s the real deal or not. Also, you can ask your prospect what would have to be included to turn it from a NO to a no-brainer at that same price. They’ll tell you what the gap is. From what they tell you, you may realize that you include what they need but just didn’t explain it well. Then you have an opportunity to reexplain it!
Be sure to check out Kendrick’s post and practice following up and inquiring more deeply about there objection. You may be amazed at what you discover!
Woooooohoooo!This is great – I got to point number 1 and realised that I’ve had an itchy feeling about this for a while. Just because everyone in my industry charges more or less what I do, I;ve been holding back. My only question would be: I am not at the point (re point number 4) where I have a waiting list – but that doesn’t matter, right? I am not desperate for clients at the moment, but if I had loads more, I wouldn’t be able to handle them all.
great post, perfect timing!!!
thank you
claire
You do not have to wait to have a waiting list to raise your prices–that’s just one of the 5 possible indicators it’s time to raise your rates. It’s not a checklist so you don’t have to hit all 5 points 🙂 In fact, if you did, you would definitely have waited way too long!
If you’re feeling the itch, go for it! Because the next step is resentment and you want to avoid that one. Excited for you, Claire!
Love this Jenny, and #2 in particular resonated with me. I had never even considered the resentment factor and at times, I’d find myself chastising myself for discounting a service I know is worth more. And for everyone on here who is considering moving out of the “per hour” model, I HIGHLY recommend this! It’s true, when we focus on time, or our clients focus on how much time they’re getting, at least in my experience, it’s a sign that I need to go back and convey the value of what they are receiving. I’m actually taking off my intuitive readings by “time” next week because I just really want to serve at a deeper level.
I recently raised my rates and I have to say, although I was scared to put out my first $1500 package, my heart and soul are over the moon happy to over-deliver and give them the absolute best of me. And I find that the clients that commit at higher price points tend to get the bigger, jucier results too. Thank you Jenny for this and for all your help sister! xo
I’m so excited for you, Diana, for moving to packages and upping your rates. I know you’re fantastic at what you do, and you get results!
Thanks for sharing your experiences here with others because I know we all learn from one another’s stories and successes!
Cheering you on, woman!
This has “me” written all over it! As I went down your list all I could say was “that’s me, check… oh, also me…. yes, very true… me me me.” I think the biggest part is the resentment and realizing how suddenly you don’t want to work for someone because you feel like you’re not being valued.
I’m in the process of reworking my rates and raising them and this blogpost was sooo helpful. thanks Jenny!
It’s so important that we feel valued as the “giver” because when we feel like the other person is fully receiving our work, we engage and give more. It’s all around good juju!! So charging prices that make you feel valued and make your client fully commit to the work is critical!
So glad you found these tips helpful! Stay tuned for the next two weeks because I’m going to support you all the way through telling your clients your rates are going up!
Awesome post! Thanks for this Jenny! Great reminders about valuing myself and my services. I’m really resonating with #2 and #3! I recently raised my prices but still feeling a little resentment, so maybe its time to raise them again.:) And LOVE the reminder about solution-focused offers… I sell peace of mind, I sell empowerment, I sell confidence and I sell better quality of life! 🙂 Thanks again!
You got it! Any resentment definitely means a price increase is due! You’re on the right track. Hang tight for the next 2 weeks’ posts to help you move through the pricing increase process and tell your clients!
WOW! You know when you’re nodding “uh-huh….yep…ha!” thank you for the awesome post. I was literally JUST asked about speaking, which I have never charged for, but because so many of these are ringing true, I am glad I did bite the bullet and charge!
Thank you!
Yay! So excited for you! I remember the first time I got offered to be paid for speaking, I was beyond excited and getting offered to be paid well made me want to deliver the most awesomest talk ever! It’s great to get paid well because everyone wins!
I needed to hear this! I recently raised my rates and felt almost guilty for it. But clients and other people I respect kept telling me I was undervaluing my worth and that I could charge twice (or more) what I was asking.
So I pulled the trigger a couple weeks ago and I’ll tell ya, I’m glad I did. I’m happy to put out my true value into the world and am close to maxed out on client capacity. There’s nothing more beautiful than stepping into your value!
xx
I love that you listened to people telling you it was time, Allie! You have such great people in your life, that’s for sure!
Woohooo on raising your rates. Nice work and I’m thrilled you made the leap. Thanks for sharing that here!
Jenny, this was a great post.
It’s definitely struck a cord with me, I see too much of me in your list. Thank you for your brill insights, as always!
xo Keep ’em coming!
As someone who has had the fortune of working with you, I know you could raise your rates and still attract fantastic clients 🙂 You’re a genius! xo
Holy noodle Jenny! 🙂 So with a move coming up its made me tighten my belt about getting some things done and one of those “better get it taken care of” has been looking at my rates! I know I’ll be raising my rates a little because I realized that I had been undercharging on the technical side of things. Now I get to correct this error finally! <3
Great plan! It’s always good to do a periodic review of your prices to make sure they still are working for you and your biz. Hopefully the next 2 posts will help you make it happen!
I’m excited to read them! <3 your blog and awesome tips Jenny!!
Last week I had a client consult.
I said: 210
The person said: 310? (and they sounded excited)
I said: No, 210
Client said: Oh!
I wanted to cry.
They were CLEARLY willing to pay 310. And I often find myself thinking (as I prep for the service) that people aren’t actually paying me for the lengths I go to to ensure that they shine after we are done working together.
Yet other people cry about that price… But after that reaction, I am definitely gonna raise the price. Now I am thinking I might do three tiers for it…as one of your other post suggested. A 90-min version, my regular two hour version upped to two hours with a one hour follow-up, and (2 hr + 1hr follow up) times 2 session version.