9 Secrets Revealed for Raising Your Fees

[onecoach]

When establishing your fees, you have to consider two things:

1. What you need to charge for your products or services, and
2. What customers are willing to pay for them.

You, as a small business owner, try to keep your fees steady as much as possible, however, if gas, shipping, health care, food, and many other costs go up, you most definitely need to raise your fees too if you want to stay in the market.

It is understandable that you raise your fees, everyone does; you just have to ensure you communicate it appropriately so that your customers accept it without any complaints.

Here are 9 secrets to do just that:

1. Don’t maintain lower fees because of fear
Try to identify if you are making excuses based on fear or limiting beliefs for not raising your fees. For example: “If I raise my fees, customers will find a cheaper provider”, or “My services are not worth so much”.

2. Have clarity about where your minimum profit point is
You should never lose with a sale. In fact, instead of thinking in terms of what you need to earn, think in terms of what you wish and deserve to earn.

3. Center your fees on the worth of the benefits and results that your products or services offer your customers
If you are good at solving someone’s problem, and if that problem is worth solving, he or she will be very pleased to pay the right price for your help. A business coach, for example, helps small business owners make more profit with their businesses, and this is very valuable to them, thus, the coach’s fees are based on this value.

4. Establish your fees in accordance with your level of expertise
The more experience you have, the higher the fees you can charge.

5. Research the competition
How much are others charging? Do they offer the same as you? Do they have the same level of experience?

6. Identify if your products or services are commodities
This is, if these are equal to what others are selling. For example, if you sell a 32-inch Sony TV, it is the same TV your competition is selling, thus, it is difficult to differentiate if not by price. But if what you offer is unique, and you possess a special set of skills and experience, you will be able to charge more. In fact, in these cases, if you charge too little, you can scare the good customers away.

7. Decide if you will raise your fees for everyone or just new customers
You can start by raising your fees for new customers; however, at some point, the fees you charge your current customers will have to go up too.

8. Go for the 80/20 equation
Identify the 20% of your customers who give you the lowest profit and raise the fees they pay you. Remember you are in business to make a profit, and unprofitable customers are not an advantage.

9. Call or write to announce your new fees to your current customers
It is important to let your customers know in advance that you will be raising your fees, so write them a caring letter or call them personally to announce the fact.

Rachel Clarkson
Rachel Clarkson helps small business owners to grow their companies, increase revenues and become great leaders. Rachel’s articles can be found at the OneCoach blog:OneCoach.com/blog - Business Insights

[JohnYE]

Hi Rachel,

Great post!

I'm always surprised to see how many companies will lower fees/prices as a knee-jerk reaction to falling sales, whether in a challenging economy, shift in the market, or whatever the cause. Anyone can give away the farm to increase traffic. What's admirable is a company that holds firm on price and instead works on offering more through superior service, better quality, etc.

Keep posting and offering your expertise. We love it!

To your success!
-John


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