Here's a story that NEVER happened: Jim started Jim's Housecleaning 12 years ago, and he hasn't raised his prices once. Not once!
His crews are a little underpaid, and he knows some of his best guys are going to leave unless they get more money for their work, so he's decided to raise prices. It's about time, Jim.
Jim decides, instead of telling his clients about his price changes, he's just going to surprise them by charging them more after he performs his services. So Jim raises his prices and NONE of his clients complain. Jim keeps all of his clients, his employees get paid more, and everyone is happy.
Stop dreaming, Jim.
When you want to raise your prices (or you NEED to), you need to do it with care. Here are a few tips to raise your prices without losing all of your customers.
Jim's first mistake was trying to deceive his customers. Sure, maybe one or two of his customers didn't notice the increase in price, but you can bet the rest were mad as hell.
What if a gas station charged you $7 a gallon and didn't tell you until after you filled up your car?
Be honest with your customers. Let them know that you have to adjust your prices to stay on top of the market. Most customers are wary of tricks and untrustworthy companies, so if they see you as honest, they are more likely to stay with you.
Not sure what your clients are worth? Use our Lifetime Value Calculator to find out.
Remember when you first started out in the business? Remember how little you knew about how everything REALLY worked?
Your customers are even more in-the-dark than you were. They don't know ANYTHING about mowing, or landscaping, or cleaning, or any service industry.
You're the professional - that's why they trust you. So earn their trust. Tell your customers why you have to raise your prices - explain how you do your job. Explain all the things you have to do to get the job done. Explain to them that they are paying you because you know how to do this job like nobody else. Most of your customers will understand, and that's all it's going to take.
Thank your customers for being loyal. Thank your customers for taking a risk with you. Thank your customers for sticking with you.
Who doesn't love to be thanked?
You might feel guilty about raising your prices. You might feel like you are somehow taking advantage of your customers.
Let me say this now - one of the worst things you can do is apologize for raising the rates of your services. Some of your customers are going to think you're being insincere. Some of your customers are going to think that YOU don't think you're worth it.
Explain why you have to raise prices, and move on. If you apologize, your customers might not forgive you.
If you have 300 clients, don't raise your prices on all 300 clients at the same time. Test it first!
Call up a few of them, explain the situation, be honest, and thank them. See how they react - did all of those clients cancel? Maybe you raised prices too high. Did all of those clients accept your raised rates? Go with it!
Testing small groups is the best way to fine-tune your approach to raising your prices. You will learn all of the concerns that your test clients have about your changes. This is going to help you nail down the process, and keep more of your customers.
For the first few visits after you've raised your prices, you need to show them that you're worth the extra money. Don't tell them you're going to over-deliver, just make sure that you put in those nice finishing touches to remind them that, "Hey, this company is definitely worth the price."
Raising your prices can be intimidating and scary. If you follow these few tips, you'll find that your clients will be much more understanding of your case. Be confident, and good luck!
Thanks for reading!
Tags: Business Operation
