If you offer a high-quality service that your clients respect, then there is no concern in increasing your price. However, ‘how you increase your prices?’ is the real question. It is understandable in a competitive market that you would be cautious to increase your fees. But as long as you have differentiated yourself from your competitors there is no need to fear when raising consultancy fees.
Differentiate
When planning to increase prices, it is important that the clients believe you are offering them a service that they cannot get elsewhere. If a price increase is to enable you to continue or introduce a new feature than customers will be less resistant to a price increase.
One way to differentiate yourself is to offer free advice to establish a rapport with your customers and create an atmosphere of expertise.
Another way to set yourself apart from others is to use MeetFox. Our platform can be integrated into your website, social media and emails, saving clients loads of time and increasing the chances of bookings. The service enables you to schedule, remind and meet up with the client all in one place. Our platform also allows you to maximize your time slots, to prevent turning down clients. Now more than ever, video meetings are the most convenient way to meet with clients, with us you can make your service more approachable, easy and flexible.
Reasoning
Clients will wonder “why are you increasing prices?”, you need to make sure your price increases are justified and not seen to be exploitative. You will have to calculate what costs have increased and how frequently these prices will increase, so that the price increase translates into a fair price for both you and client.
Coaches and consultants need to base their fees on the value they deliver.
If you are wondering how much you should charge simply consider the following:
Start with your desired annual wage. For simple math, let’s assume you want to put $120,000 in your bank account each year.
Since you are self employed, you will need to factor for taxes, health insurance, and business expenses. For that, let’s add $60,000 for a total desired annual income of $180,000.
Let’s assume that you book 50% of your working week time on paid consultations each week. Say you are only working 47 of the 52 weeks and you are booking half of your time each week.
Twenty hours a week for 47 weeks = 940 paid hours of work. If you want to earn $180,000 annually, you would need to charge $191.49 per hour for your time.
So, internally, you know you need to baseline charge of ~$200 per hour to hit your goals.
However, you need to factor in the value the customer gains from your advice and adjust the price accordingly.
Type of increase
To increase prices, you need to ensure that you decide whether the increase is one-off or regular. In addition, you need to decide whether you will charge your loyal customers the increased prices. You do not want to deter regular income from frequenting clients.
The benefits of regular increases in prices are that your clients can factor in when the prices will rise. When you do increase prices, they will be moderate and predictable. However, depending on your clients some may like a flat fee that will remain stable.
On the other hand, you could charge a one off increase. These tend to be larger increases for the client, which may reduce demand, but it enables you to keep prices constant for a longer period of time.
Timing
Timing is everything when you are planning to increase fees. You need to ask ‘can the clients afford the increase?’, and most importantly ‘can my company afford the increase?’.
Where your clients are concerned, when you increase the prices it is very important to consider the time of the month/year you are planning the rise. If you are increasing fees at the same time that taxes are due, for example, then new clients will likely turn to more price competitive alternatives during this period. So make sure you always factor in your core client cashflow situation when considering fees.
Moreover, you have to ensure that the price increase will not hurt your reputation and your image in the eyes of your loyal customers. If it looks as though you are not making justified price increases then it can quickly sour a relationship you have developed with customers.
Communication
This is the final and perhaps most crucial point, you must make sure you communicate to your clients clearly and logically about the price increase. You need to state your reasoning for your price increase, for example rising overheads or inflation, and show that it is a fair and modest change. Enable them to feel confident in your service, by stating the frequency of your price increases. And remind your clients through your communication streams that you are a specialist, who can offer a service that is unrivalled.
