Smarter Pricing Strategies: Notify Clients Early
Posted by Michelle · Leave a Comment
Remember the last time you went to the gas station expecting to pay a certain amount — and discovered the station had raised their prices 10 cents in the past day? After you got over the initial shock, you might have even been angry that the prices had skyrocketed in such a short time. Avoid making your clients feel the same way.
Tell new clients up front
I mentioned earlier that you should create a pricing strategy. Once you have this strategy in place, you’ll know how much you’re charging now, when you”ll be raising your rates and by how much. So when you bring a new client on board, simply let them know that your quarterly or annual (or whatever) rate hike will be coming up and that they need to prepare for it.
New clients will appreciate your honesty and they’ll make plans to absorb your new prices if they want to stick with you. We’ll talk more about making them want to stick with you later…
Notify your existing clients
You’ll want to send a note to your existing clients ahead of time so that they know a rate hike is coming. This way, clients can adjust their budgets and they won’t feel like you’ve dumped higher prices on them at the last minute. I recommend a three month notice. Even better, if you have written contracts with each client, write your rate increases into the contract. You can also setup your long-term contracts so that they are re-evaluated after a certain period of time and rate hikes applied.
Next, we’ll talk about how you can ensure your clients want your product or services, even after you raise your rates…