How to raise your prices and keep your clients happy
As we approach the last few months of the year, it’s a good time to reflect and review your business and your achievements. Are you at the point you’d hoped to be? Are you reaching your financial goals?
Now is the perfect time to assess whether your prices are right for you and your customer. Being self-employed can make increasing your prices seem scary and, dare I say it, greedy. But aligning your prices with the market and competitors is an important thing to do – and may lead to the realisation that you’re not currently charging enough.
Wondering how to go about raising your prices? You could try following these five steps.
1. Do your research
The first thing you need to do is dedicate some time to researching what others are charging, and what you need to charge. You can do this by searching for your industry keywords in Google and finding people who have similar services, or having a look on websites that list how much self-employed people are charging for certain services. For example, if you work in the media, NUJ Media has a comprehensive site with prices for all the big media outlets.
You also need to make sure that the price you’re charging is one that covers your costs and also covers additional self-employed costs like holiday pay and National Insurance. There are a few calculators around that will help you work it out (try Contractor Calculator (external link)), or you could search for how much your role would be full-time as an employee.
2. Choose your time
One of the best times to unveil a price increase is around the start of the year. You’ll need to give good notice, so look at early December to start emailing your current clients. The email or letter can be something very simple, along the lines of:
“I’ve really enjoyed working together over the last year, and I’m looking forward to hopefully continuing that working relationship. At this time of year, I like to review my business and prices, to check they’re aligned with the market and my competitors. Due to increased costs and an increased level of services, my prices will be increasing from January 30th to xx.”
If you’ve learnt any new skills, done something particularly brilliant for a client or have made a big change in that particular client’s business, make sure you mention it in the letter to remind them why you’re worth the raise.
3. Give your current clients an incentive/bonus
One way to soften the blow for your client is to offer them a special deal or incentive. For example, you could offer to keep the price at the current one for three months if they buy in advance. Make it clear this offer is ONLY for your current clients though.
You may also want to offer packages, so if they can’t afford to pay you for your current services, they can still hire you for a smaller group of skills. Discount your time, not your fees.
4. Assess your ideal customer
You may find that one or two of your clients decide they don’t want to carry on with you. That’s absolutely fine. If based on your research, you’re charging the right amount, then you’re targeting the correct clients. It’s ok to be too expensive for some people, especially if your skillset and experience grow. You may well find that by increasing your prices, you start to appeal to a whole new market who understand that high quality = higher prices.
5. Update your prices everywhere
Finally, make sure you’ve updated your prices everywhere. If you share your prices online, make sure you update them. Double-check your invoice software. Make sure any paperwork you have with them on is updated.
One other tip when it comes to upping your prices. This time of year is also a great time to look at your branding. A rebrand and a price increase go hand-in-hand and often softens the blow of higher prices.
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At Hiscox, we want to help your small business thrive. Our blog has many articles you may find relevant and useful as your business grows. But these articles aren’t professional advice. So, to find out more on a subject we cover here, please seek professional assistance.