“So there it is… if we raise your prices by just $355 per Annual Review that will give you an extra $197,650 a year in revenue
…..for doing the same amount of work
….. that’s pure profit”
The numbers were irrefutable, there at the bottom of a huge spreadsheet. All his clients, old prices, new prices – bingo.
Mark nodded his head, blinked and muttered, “Let me think about it”.
I was exasperated.
“We’ve done the work. You haven’t raised your prices in eight years, CPI is real.
Your clients love you.
We’ve benchmarked your prices. You are at the lower end of the scale.”
“Just let me think about it Alex”, Mark grumbled.
I had hit a nerve. Price rises are tied up with so many personal issues. Self-esteem, a fear of loss, a long-suppressed dare to dream.
Inside I screamed but on the outside I nodded.
“Ok Mark it’s your business, but I will come back next week to discuss next steps.”
When our clients can actually see the $$ value of a price increase, it goes one of two ways:
Their eyes light up, the truth sinks in and all sorts of thoughts dance across their eyes:
“I can afford to pay for top people, so we can deliver excellence”
“I can finally afford to take THAT holiday”
“No more worries about cash flow”
Or they go dead quiet, transfixed like deer in the headlights.
Then I know it will be weeks or months of coaxing before we execute the change-over program.
For Mark, it was two months.
Trawling back through the market research and financial modelling. Quadruple-checking the numbers. Rehashing scripts and letters. Role-playing the meetings over and over.
Then it arrived. The first conversation.
Mark was a jittering mess but somehow but he stumbled through it.
He was on the phone to me straight after – excited, jabbering like a child with a present.
“They’re happy to pay…. thought it was probably two years overdue.”
Businesses that raise their prices don’t just end up with more money. But a stronger sense of self-esteem and confidence.
Along the way, they gain clarity about who they best serve. Which clients to let go of.
The final kicker is that price rises affect more than your existing clients. There are all the new clients to come in.
For Mark an extra $197,350 in profit was transformative.
Our clients come to us to solve business problems but they typically boil down to two:
- How can we be better known?
- How can we grow revenues?
Growing revenues is a cliché. It’s either more new customers, more services to your existing customers, or raising prices.
And they always duck higher prices. Even though it has the biggest immediate impact on profitability.
We have a well worked through program for raising prices.
So, if you haven’t raised your prices in a while, get in touch. It’ll change your world.
Call 02 4023 5958 or by email.