How to Talk to Your Clients About Raising Your Prices
You’ve determined that it’s time to raise your prices. How do you communicate this to your clients and customers?
First of all, don’t make it sound like you’re breaking bad news. Raising prices is a natural and recurring step in the life of a service-based business. Know your worth. Get confident and comfortable in your own head of the value that your business provides. If you can’t convince yourself that a price increase is warranted, then you won’t be able to sell it to anyone else.
Obviously, you don’t want to alienate your clients. You want to keep them happy. And believe it not, your clients don’t just want you to survive—they actually want you to be profitable. So this can absolutely be a win-win situation if you play it right.
You especially want to get your long-term clients on board with a price increase. If they’re unhappy, they have the potential to spread their discontent throughout your culture and community of members. This is the kind of water fountain talk you want to avoid happening at your place of business or on social media.
In this post, we offer some suggestions and thoughts on informing your clients about pricing changes. At the end of this post, you can find a link to our pricing increase template letter to help make this task easier for you.
- For starters, always give 30 days notice when raising rates. You don’t want clients to feel like they’ve been rushed or ambushed into a new commitment.
- Put it in writing—at the very least, you should send them an email.
Keep in mind, your clients will view a rate increase relative to the price they’re currently paying. A $6 per month bump might seem like no big deal, but if their membership fee is already $80 per month, that’s a 7.5% increase in price, which may not go unnoticed—especially if they’re currently paying a higher-than-market price for your service.
- Transparency in general can go a long way toward sweetening the news. Explain exactly what you’re doing, why you need to do it, and make it relevant to them. If you made a guarantee to provide a certain level of service as part of their membership agreement and now you need to increase pricing in order to maintain that level? Explain that.
People get attached to their service providers especially in fitness and wellness. They care that they are compensated fairly and have good working conditions and opportunities. So your clients will usually get behind an argument for increasing rates that involves paying their service providers more, or investing in your team in some way. It’s more than fine to get a little personal about this in your email.
As I’ve said recently, I’m in favor of increasing prices regularly by small amounts rather than by large amounts less frequently. Clients are more accepting because they’re likely to see that you’re just keeping up with the rising cost of doing business. But there are times when a large price increase is justified—to you, at least.
- If you’re implementing a small increase for the cost of doing business, say 2 to 3%, amounting to a few dollars more per month, it’s okay to simply inform your clients of this and invite them to contact you with any questions or concerns.
- If it’s a bigger increase, however, it might be a good idea to sit down with your clients one-on-one, or give them a call, in addition to sending an email.
The important thing here is to demonstrate how they’ll benefit from the improved services you’ll be providing with more funds in hand. Even better if you can tie it in directly to how this will help them reach their goals or soothe their pain point.
Maybe you’re going to improve the temperature control in your building so they won’t be chilly anymore while getting a massage. Or maybe you’re adding new equipment so they won’t have to wait in line to use the weight machines, and they can get home faster to their kids on gym night.
- If you’ve been seriously underpriced in the past and now need to get in line with the market, you probably need to be adding more services to justify a very steep increase. I’ve seen a gym membership cost jump from $59 to $100, but they changed their business model to do that by adding new equipment and more programming at the same time, like additional access to coaches and classes.
In general, if you’re not comfortable asking your clients to ride the increase with you, ask yourself if there’s something you need to add in to your services so that you ARE comfortable charging an increase.
And because we know it’s hard to ask for money, sign up below to get a free pricing increase template letter you can use.