OK, so you’ve decided to steal a little more money from your customers. They’ve been taking advantage of your natural kindness and timidity for far too long, and it’s time for them to pay!!! Great. I’m proud of you. You’re finally becoming the kind of ruthless, heartless capitalist I always knew you could be.
That’s one way to look at it, of course. Another (more ordinary, less evil) way to look at it is the fact that your business deserves to grow. Costs are always rising, and you’re also always getting better at the work you do. You’ve seen more successful people than you who aren’t more skilled than you, and you now have enough confidence to expect a seat at the same table. Great. I’m proud of you. You’re finally becoming the kind of totally normal business owner I always knew you could be.
Except, how are you supposed to ask for more money? I’ve tried going up to strangers and saying, “Hey, give me some money!” But then I usually get arrested. There has to be a better way, right?
Yes, there is. Here are a few ways you can raise your prices without angering your customers or losing any business.
Pick an Arbitrary Date
This is a very popular approach with people in the service industry. Photographers, hairstylists, web designers and even keynote speakers will sometimes inform everyone they know that, “Effective January 1, my new fee structure will be X.” This kind of across-the-board price increase will avoid any hesitation you might feel at raising your prices for a single client, and it’s also very common, so odds are several of your clients will be familiar with the drill. I’m not normally a crowd-following type of guy, but I think this is a crowd worth being a part of.
Practice on Referral Clients
We covered this topic in an earlier article, but it bears repeating. As I’m sure you know, it always seems to turn out that people who paid you $400 (or $4,000, or $4 billion) to do a given thing always end up referring you to other people who also expect to pay you $400 (or $4,000, or $4 billion). However, you are in possession of an excellent bargaining chip – namely, this person has been told that you’ll do a good job. So if you charge them $450 for something their friend paid $400 for, they’ll have to ask themselves if it’s really worth $50 to find someone cheaper for whom they don’t have a referral. Most will take a solid referral over a small savings, and you should absolutely be using that to your advantage.
Just Do It!
Yes, this actually works, and you don’t always even need to tell people that you’re doing it. Airlines change their pricing all the time without telling people, and so do grocery stores. Amazon just told you that they’re raising Prime subscription rates, but they’ve never told you that they add a surcharge to everything they sell to pay for all that “free” shipping we’ve all gotten addicted to. And while I recognize that some of these approaches border on dishonest, sometimes this is one of the only sensible options you’ll have. If you own a restaurant, for example, there is just no practical way for you to announce to all of your customers that your menu is going to be 5% more expensive than it was a month ago. And while there will certainly be customers who pay attention to the price of every everything they’ve ever bought, there will be others who won’t pay enough attention to notice that you’ve ticked things up a little.
Congratulations! You are now going to make more money. I suggest you spend it on something frivolous, like LED earrings. My wife just got a pair, and they make it completely impossible to look her in the eyes. Maybe she’s tired of nobody ever complimenting her earlobes. I don’t really know – just go enjoy your new extra money!