5 Simple Ways to Charge More for Your Services and Not Lose Clients

You hear it often from consultants: "Hey man, you do not charge enough, just raise your prices. Your margins are too low". But it is easier said than done. Of course, because you will lose your clients! They do not care about you or your business. Read further to find how  raise prices smart and keep customers. We will add an example, to make it easy to comprehend.

Consultants often advise business owners to raise their prices, claiming that they do not charge enough and that their margins are too low. However, implementing this advice is not as simple as it sounds. Raising prices can potentially lead to losing clients, who may not care about the business or its success. In this blog post, we will explore strategies for raising prices smartly while still retaining customers. To help illustrate these strategies, we will provide an example that is easy to understand.

Successful Price Increases

Now, let me introduce you to an industry that has mastered the art of price increases and achieved great success - the airline industry.

When it comes to flying from LA to New York, you will never receive a straightforward answer regarding the cost. The price is influenced by various factors such as the class of flight, luggage allowance, timing of purchase, legroom, seating arrangements, payment method, dining options, and even the number of stops along the way.

Numerous variables come into play and impact the price of that ticket to New York. Yet, here you are, charging for your services based on square footage or hourly rates.

Imagine sitting down at a restaurant and instead of being handed a menu, you are presented with a bill for a plate of sunny-side-up eggs. But hold on, you didn't inquire about other dishes, compare prices, or even know what else the restaurant has to offer. So why do you subject your clients to this when, after a brief conversation, you present them with a total price, expecting them to commit? Fortunately, some of our clients are more forgiving.

Let's dive into the most effective pricing strategies and use them as guiding principles to create our own pricing guidelines. To illustrate these principles, let's consider a bathroom remodeling construction service as an example:

Five Principles of a Smart Price Increase

1. No Price Increase

The first principle of a smart price increase is to consider not increasing the price at all. By allowing cheap clients to have their lower price, you can avoid losing any clients due to pricing. In fact, you can even attract more low-price clients by placing them within the "brackets of limitations." However, it is important to find ways to make these cheap projects profitable. By identifying actions or materials that may be overloading your business and eliminating them, you can potentially double your profits. So, it is worth considering and implementing these measures.

2. Break Down Your Services

The second principle of a smart price increase involves deconstructing your service into its individual components. This process is both enjoyable and highly imaginative as it allows you to reflect on your interactions with clients and identify specific aspects of your services that can be extracted and presented separately as added value. 

3. Value Your Time

The third principle is using time as a value. Time is crucial. Most businesses have seasonal fluctuations. When your project pipeline is full, you can charge more per project, grow your business, and plan your next vacation. When your pipeline is empty or chaotic, you lower prices, fail to retain workers, and bring stress into your home. Make time work for you.

4. Add Boundaries and Tiered Pricing

The fourth principle involves setting boundaries to encourage clients to opt for higher-tiered pricing options. A clever pricing strategy creates these boundaries in a way that seamlessly guides clients towards choosing a higher-priced item without any hesitation. While your clients may feel like they have complete control over their decision, you know that you are expertly guiding them towards the service that best suits their needs, and charging them accordingly for each step of the process.

5. Prepare for Future Negotiations

The fifth principle revolves around proactively anticipating the diverse needs and preferences of clients in order to prepare for future negotiations. We're all human, and your clients needs may change. Recognizing that each individual possesses unique characteristics and desires, it is essential to carefully strategize and plan ahead. By thoroughly mapping out possible scenarios and potential outcomes, our goal is to ensure that every client is presented with the best deal possible.