In this episode, I’m going to teach you the exact strategies that I use to increase my short-term and long-term income in my business by increasing my prices.
We’re going to get really practical. I’m going to take you through the steps that you need to put in place to make sure that when you increase your prices, it’s actually a business growth time in your business.
Here for the links referenced in the show notes?
30-Day Business Blast Udemy course: tashcorbin.com/udemy
Profit First by Mike Michalowicz: profitfirstbook.com
Let’s dive in!
First and foremost let’s dive into answering the questions: Why should you increase your prices? What are the benefits of increasing your prices?
1. It’s going to increase your income
The first benefit is going to be an increase in your income over time.
Many people think that if you increase your prices, you’re going to have a dip in income to start with but then it will eventually be a higher price point. However, if you employ the right strategies, a price increase can actually bring in more money in the short-term AND in the longer-term in your business as well.
It’s a really beautiful thing for you to do IF you’re starting to get to that point where you might be a little bit at capacity, you might be starting to worry about whether you can take on more 1:1 clients, or things have started to get a little bit plateaued in your income and you want to shake things up a little bit.
2. Being seen as a slightly more premium service
If you think about the things that you purchase, quite often we don’t buy the cheapest of the things because we want better quality – especially when it comes to services.
I know for me for example, I walk straight past the $19.95 haircut place.
Yes, it may be the cheapest thing, but I want to have a quality experience and I want to know that it’s actually going to be a great haircut.
Whilst the $19.95 haircut may be amazing, the price point makes me think that maybe it won’t be as well.
This means that by changing your price point up to a higher level, you can start to work with a slightly different niche and you can grow your niche with you, but most of all, you can (potentially) be seen as a premium product or a premium service compared to others out there on the market.
3. It creates more capacity for you
If you’re starting to feel like maybe you have a few too many 1:1 clients or you want to reduce the number of 1:1 clients you’re taking on so that you can move into leveraging and creating online courses and memberships, a price increase is a great way to do that.
Particularly if you follow this strategy, you will have a chunk of money come in in the short-term which can really help to settle down some of those income fluctuations that happen when you go into launching courses and programs.
This means that you can open up a bit of space in your calendar, whilst not necessarily decreasing your income.
This can be a really good strategic move when you’re looking to go into that next phase in the online business processes.
4. You and your clients bring your A-game to sessions
I think this is probably the BIGGEST shift that I’ve seen since putting my prices up. My clients and I BOTH bring our A-game to the 1:1 sessions that we do.
When I first started my business and I had a special where I did a 2-hour session for $97, people would come along to that session and, to be honest with you, they didn’t bring their A-game.
When I was starting to get to the point where I was actually very popular and had lots of clients coming through, I found that with my special $97 session, I wasn’t necessarily giving it my absolute best.
I actually find that the more that I charge now for my services, the more that I am making sure that I bring my A-game 100% to those sessions.
I charge $1,495 an hour now.
But this means that the people who turn up, don’t come to the second session having not done their homework from the previous session. That is a significant difference.
I used to have a 1-month package that was $1,000 for four sessions.
Several times, people came to their second or third session and they hadn’t even done their homework from the session beforehand!
The more you increase your prices, the fewer people are taking that stuff for granted, and the more they’re bringing their A-game to each session.
When I have a $1,495/hour client these days or when someone wins a free 1:1 session with me but they know that it’s normally $1,495 an hour, they turn up with their questions.
They turn up with their numbers from their business, and they turn up prepared.
When I send them off with the stuff they need to do, they actually go and implement it.
There are a lot of different benefits to moving your prices up, particularly if it’s the right stage of business for you.
Now let’s dive into my four steps to increase your prices, and how you can use it as a strategic opportunity.
1. Come up with a plan
We want to know what the date is of your next price increase. You want to give people plenty of notice.
I usually say at least two weeks notice depending on how in touch with your audience you are and depending on how in-demand you are.
You can do it all the way up to around six weeks depending on how many people you want to make sales from in that price increase strategy.
What the goal is for you is to sell a chunk of stuff at your current price by letting people know that your price is going to increase on a certain date.
Let’s say it’s mid-April now and you make a decision that your price is going to go up on June 1st.
You’re going to give yourself six weeks notice.
Your goal is to get as many people to pre-purchase sessions between now and June 1st, and then have your price increase happen on June 1st.
The first step is to actually map out your plan, which includes your dates and what your new price point is (how much you’re increasing your prices by).
The more you increase your prices by, the more people are going to purchase and be motivated by the price increase, but the longer it’s going to take for people to adjust to the new price when you then go out and start advertising at that new price.
It’s kind of a balancing act when you’re picking your new price. I usually say go with your gut – say it and take some deep breaths.
What feels good for you?
What feels really doable?
And what starts to give you those little mindset wobbles?
Come back a little bit from there.
Depending on where you’re at in your pricing, I generally recommend that the increase is at least 10-20% of your prices.
If you currently charge $100, try and nudge yourself up to $125 if you feel comfortable with that. If you’re currently priced at $200, maybe you can go to $250.
It’s a good little jump but it’s not like you’re doubling your prices and completely freaking everyone out.
2. Start communicating that price increase
You want to make sure you’re getting it out to as many people as possible.
You’ve got your:
- Mailing list – you want at least two standalone emails to your mailing list just talking about the price increase for your 1:1 services
- Facebook Page
- Groups that you do your offers and promos into
Make sure you let people know that there are only two weeks to jump in and pre-purchase your hours before your prices go up on June 1st (for example).
Make sure that you’ve got a plan of where you’re going to communicate it and make sure you actually go and communicate it.
If you’re in the first 6-12 months of business (you’re just working with people 1:1), I recommend running a webinar.
Even if you’re further down the track – there’s nothing as awesome as running a webinar and getting everyone in the room at the same time.
Your offer at the end of that webinar will then be to book some 1:1 time with you at the current price before the price increase in a few weeks time.
Or even if you do the webinar 5-10 days before your price increase, that’s a gorgeous way of getting that big chunk of sales in.
Have a think about whether a webinar might be a great way for you to actually get out there and start communicating your price increase.
The other one that I always say is don’t forget to send private messages and emails to those people who have already worked with you before.
Maybe you’ve got 20 or 30 people you’ve done single sessions with before who never jumped in to work with you for an extended period of time.
Why not send them a private email and say, “Hey! It’s been a few weeks/a couple of months since our last session. Just wanted to let you know my prices are going up on June 1st for my ongoing coaching packages (or for whatever you want to call it). If you’re interested, let me know and we can work out a great package for you based on my current prices.”
What I used to do is just make it a bundle of hours.
I’d tell them: “My hourly rate is currently $97. It’s going up to $147. You can purchase up to 20 hours in advance. Just send me an email and let me know how many hours you want and I’ll send you through an invoice.”
Super simple and super easy!
It’s how I had my first $20K month in my business in my sixth month of business.
It’s nothing to be sneezed at.
At that point in time, my price was going up from $147 to $247 an hour, and I presold bundles of 10 and 20 hours working with me to many people.
Some of those people had:
- Only done one single session with me
- Been doing ongoing work with me
- Purchased the 5-hour package previously and they wanted to bump their hours before the old one had even expired
It was a huge month for me and my business.
You can see how increasing your prices can actually create some really significant results for you.
3. Support that mindset
Imagine what happened to my mindset when I went from $7,500 in November 2013, to over $20,000 coming in in December.
It was a huge mindset wobble trigger for me, and it really started to freak me out.
I also made some very silly financial decisions based on that month.
I thought, “Wow! This is my new normal. We’re going to move to the beach. Davey, quit your job.”
We did all sorts of things after that month.
But, at the same time, can you imagine what was going on with my mindset?
Make sure that you’re really clear on what this means for you.
If you start to see a huge influx of clients, make sure that you’re tapping into what’s going on, tracking your income every day, and doing some journaling every day.
Whatever mindset practices that YOU use and work for you, dial them up during a price increase strategy.
The other things I see people do is they start to communicate about a price increase, they get a huge influx of people buying from them or they get no people buying from them, so they decide it’s crazy and they’re not going to do it.
They don’t actually see the price increase strategy through.
Most of your sales are going to happen in that last week (probably in the last 48 hours before that price increase), so making a decision to stop promoting, stop sharing, or extend the price increase due date before you even get to the last three or four days is silly decision-making.
That’s a mindset thing. Make sure that you’re getting support to see that promotional plan through.
Don’t get yourself caught up in all of that negative self-talk.
4. The follow-through
This is also where I see people come unstuck a little.
They don’t actually do the price increase when they said they were going to do it – they extend it.
They don’t follow-up with people. (All these people say, “Yes, I want to buy ten hours.” And then they don’t actually send the person an invoice.)
I actually did that quite a bit when I did my price increases.
Someone would say that they want ten hours, and then I wouldn’t send through the invoice for six or seven days because there was so much going on for me with my mindset – I was spooking myself out, and I was avoiding it.
With some people, I sent them their invoice but it was actually too late; they had decided to sign up with another coach, or they didn’t have the money anymore.
I actually lost quite a few sales by not following through and following up with people.
That also happened when I did send the invoice but then the invoice due date was the day of the price increase, and a couple of days before, I didn’t send through follow-ups to says, “Just a quick reminder: Your invoice is due in 2 days. Make sure you lock in that price.”
It created some awkward situations for myself where people were sending me an email 3 or 4 days after the price increase and going, “*gasp* I forgot to pay my invoice. Is it still okay for me to pay?”
And I was like, “Yeah, it’s totally fine. How about you just pay it by tomorrow?”
I was creating all these weird fuzzy boundaries and people were taking advantage of that.
You want to make sure that you’re very good with your follow-up and follow-through with people.
The other thing that I highly recommend that you do is once you’ve done your price increase, don’t stop doing your offers.
The next offer day or the next market day in your group or in the Heart-centred group or wherever you’re advertising, do the offer at the new price.
You might think, “Well, I’m not going to make any sales so there’s no point”, but what you’re doing is getting people used to the new normal.
The other thing that really bugs me is when people say that their prices are increasing on June 1st, and then their offer on June 3rd is, “My prices are normally [the new price] but you can get it at [the old price].”
You haven’t really seen-through that price increase.
It’s kind of a spit-on-the-face for the people who did actually commit before the price increase date.
If you’re going to do a price increase, stick with it. Yes, you can do discounts but leave it a little bit down the track.
For most people, before the price increases, you’re going to get a good chunk of money in. That’s going to help you over until people adjust to your new normal.
It gives you some space and some capacity to deliver for those people who’ve purchased.
But don’t put your foot off the pedal in terms of your marketing and your regular activities to promote your services and your prices.
That’s my four-step price increase strategy.
If you feel that you need some help with your money mindset, I recommend checking out my Udemy course 30-Day Business Blast.
The other thing that I just want to say is that if you struggle with managing your money, get some help with that stuff as well.
Check out these amazing money ladies:
- Laurie Griggs
- Laura Elkaslassy
- Delaney van Baalen
There are some amazing ladies out there that help you deal with the money as it comes in and make sure you’re setting yourself up for success.
Don’t make the mistakes that I did.
That $20K month, I spent a lot.
We want to make sure that this is going to give you a buffer so that the decrease that happens in your income after a price increase (because sometimes it does happen), you can ride that out – you’re prepared for that and you’re keeping money in the kitty so that you’re not creating intense pressure on yourself 3 weeks after you’ve done your price increase.
I would recommend that as well.
I highly recommend the book Profit First. If you’re not familiar with that, it’s by Mike Michalowicz (he came and spoke at the Heart-Centred Business Conference last year). Profit First is amazing – it helps you to ride the rollercoaster of your income.
I’m not a financial adviser but there are some amazing finance gurus in the Heart-Centred group, and I always recommend people. Follow them and make sure that you’re educating yourself on how to deal with that money when it comes in.
I was not educated and I didn’t think about how there’s the extra tax that is going to come as a result of this.
You want to make sure that you’re keeping some aside for the future, as I said.
Please learn from my mistakes. Most of my business coaching is me making mistakes so you don’t have to make them.
Make sure that you support yourself in managing your money as you go forward. Miriam Castilla is very good with that as well.
Manage your money as you go forward, prepare yourself for the future, be a good custodian of your money, and look after that mindset as well.
If you’re going to do a price increase strategy or if you have any aha’s from this podcast episode, please come into the Heart-centred, soul-driven entrepreneurs Facebook Group and share using #podcastaha and the episode number (247), and tell us all about it.
Thank you so much for listening to this episode of the Heart-Centred Busines Podcast.
Until next time, I cannot WAIT to see you SHINE.