Three surprising things that happen when you increase your prices
If you are in business and you choose to raise your prices, you don’t need to seek permission, give context, justify the increase or explain why.
Increasing your prices is a fantastic way to make more money for the same amount of work. But the idea of boosting your prices probably brings up some instant reactions for you. You might be worried you’ll lose customers or clients, who are chasing a better deal.
Concerned about charging more than your competitors? Or perhaps you think you’ll have trouble attracting new business if your price point is higher?
As a qualified accountant with 10 years’ experience and having been a money mentor for 6+ years, I’m fully committed to the concept of being strategic and realistic when it comes to pricing in your business. But I’ve also discovered that when you increase your prices, a few surprising (and positive) things can happen.
Your client trusts you more
And they micromanage less. When a client invests a decent sum into you and your products or services, they do so knowing they have chosen an expert. So they lean in and trust that you are there to guide and support them, and they don’t question what you are doing every step of the way. Because they don’t question you and they take your advice onboard, they, therefore, get better results.
They’re also often super clear about what they want to achieve, which makes it much easier to set a clear outcome at the beginning of the working relationship. I know that in my own business, if I find someone amazing, I’ll pay them well and trust that they deliver. I have a much higher success rate this way, as opposed to going with the “cheapest” option.
Here’s a real-world example of how this played out in my own business: recently, a client told me: “I just do what you tell me to do.” It was the best endorsement I could possibly ask for because it showed that she trusted she was getting expert advice from me and better yet, she was implementing it (with fantastic results).
Making sales becomes easier
Yes that’s right — in my experience, they become easier, not harder.
Whenever I’ve increased my prices or I’ve encouraged my clients to revise their pricing structure upwards, I’ve noticed that negotiations on price disappear (as the client understands that your rate is your rate) and making the sale becomes easier.
This is especially true if you can demonstrate that you’re a leader in your industry, and you can prove that you drive incredible results for your clients.
When this happens, the results speak for themselves and the conversation around price virtually disappears in favour of a conversation about outcomes and success metrics.
Here’s the thing: people aren’t paying you a price for a product or service. They’re paying you for an outcome — a solution to their problem. If you deliver and they know they can rely on you to deliver, then your clients will happily pay you — no matter what you are charging. Therefore, it’s important in your marketing to focus on the results you deliver, not on the cost of your services.
You’ll gain industry credibility
The third surprising thing that can happen when you increase your prices is that you become much more respected by peers and potential clients. Often, the price point that you charge is a signal that people use to form a perception of the quality of work you deliver. A lower price point can convey a potentially lower quality of work or provision of service. Meanwhile, a higher price can demonstrate that you have senior expertise and experience.
With a higher price, your industry peers and colleagues place you in a different, higher position. They’ll be recommending you to higher ticket referrals who can afford your prices and you have the potential to enter a whole new market.
One final tip? If you are in business and you choose to raise your prices, you don’t need to seek permission, give context, justify the increase or explain why. When you are confident about the price you’re charging and you’re confident you can deliver the results you promise, focus on that. With this confidence comes clarity that you don’t need to justify a price increase, as you know you’re a quality leader in your industry… and the right customers – the ones that can afford your services or product – will buy from you as a result.
Clare Wood is a money mentor and ex-accountant (CPA).
