6 Tips to Raise Your Prices
Updated: Apr 6, 2019
“Re-position the business and double your rates” - that got his attention…
I had dinner last night with a good friend who also happens to be rather excellent at what he does.
But he’s not charging anywhere near what he’s worth...
He’s fallen into the trap of thinking his rates have to be inline with jobbing tradesmen, when he, is in fact a craftsman.
And that’s the big difference…
The conversation started around what some decorating companies are charging here. Some of the quotes he’d seen were eye watering. We’re not talking thousands, we’re talking 5 figures.
And that’s absolutely fine if they’re delivering a top notch service. The right people will part with their hard earned money if they’re getting value for it - more on this below…
So the problem my good friend has is he fell into the trap of thinking he’s swimming in a red ocean with all the other local trades.
But he’s actually at the next level. We know, we’ve employed him many times, and he’s our go to person for carpentry, because nobody does it better.
So how to raise your rates when you’re already established?
Re-position the business...
This is what I would do:
Re-brand the business. Keep the same, well known name and reputation, but create a new Brand Identity which reflects the bespoke craftsmanship nature of what he does
Gather testimonials, LOTS of testimonials. Everyone he works for absolutely raves about his work, so they’ll be more than happy to talk about it
Get great images of your work, and get them on your newly branded web site along with all of those lovely testimonials. Keep it simple, images and recommendations are solid gold, people don’t want to trawl through pages of text
Define your new customer avatar. Those being the high net worth clients who understand, welcome and reward craftsmanship, of which there are many on this fine island
Decide on what you want to charge on an hourly basis. And this is the tricky part, because we generally undervalue ourselves, it takes guts to put our prices up, but we have to do it
Test . . . Don’t publish your rates on your web site. This way you can maintain your existing customer base, but when you go to price a job for your new customer avatar, quote them based on your new rates.
If they’re up for a bidding war, then you’re on the wrong manor - politely decline and move on.
By doing this, you’re not betting everything on the farm by putting up your rates across the board. Your existing customers will love your new brand, (and you could even nudge their prices up by 5%) maintaining your core business whilst you raise the game.
Because every job he does is different, our good friend is not in a race to the bottom, so the new customers who understand value will gladly pay for his excellent work…
And the beauty of this is, they’ll show off his excellent work to all of their wealthy friends. Bonus.
Now this isn’t about ripping people off, this is about getting paid what you and your services are worth.
I see so many good businesses that are undercharging, and either running themselves ragged, or in a soul destroying race to the bottom.
A lot of the the time it’s about belief and mindset. We’re our own worst critics which can hold us back both figuratively and financially. Sometimes we have to step out of our comfort zones in order to progress.
Charge what you’re worth, and if you have to re-position to do it, do it!