Hello, super savvy entrepreneur! Welcome to episode 147 of the Heart-Centred Business Podcast.
You’re going to want to pay attention to the episode today because I’ve got a super awesome freebie that goes with today’s content.
You can find everything you need at tashcorbin.com/147.
I am so excited about this super practical episode of the podcast today.
I’m going to teach you the exact strategies that I use to increase my short-term and long-term income in my business through increasing my prices.
We’re going to get really practical. I’m going to take you through the steps that you need to put in place to make sure that when you increase your prices, it’s actually a business growth time in your business.
Let’s get started with today’s episode…
First questions answered, “Why should you increase your prices?”
“What are the benefits of increasing your prices?”
Of course, the first benefit is going to be an increase in your income over time.
Many people think that if you increase your prices, you’re going to have a dip in income to start with but then it will eventually be a higher price point.
However, if you employ the right strategies, a price increase can actually bring in more money in the short-term AND in the longer term in your business as well.
So it’s a really beautiful thing for you to do IF you’re starting to get to that point where you might be a little bit at capacity, you might be starting to worry about whether you can take on more 1:1 clients or things have started to kind of get a little bit plateaued in your income and you want to shake things up a little bit.
4 Reasons Why You Should Increase Your Prices
1. It’s going to increase your income.
2. You can actually start to be seen as a slightly more premium service.
If you think about the things that you purchase, quite often we don’t buy the cheapest of the things because we want a better quality.
And particularly when it comes to services, I know for me for example, I walk straight past the $19.95 haircut place.
Yes, it might be the cheapest thing but I want to have a quality experience and I want to know that it’s actually going to be a great haircut.
And whilst the $19.95 haircut may be amazing, the price point makes me think that maybe it won’t be as well.
So actually, by changing your price point up to a higher level, you can start to work with a slightly different niche, you can grow your niche with you.
But most of all, you can be seen as – potentially – a premium product or a premium service compared to others out there on the market.
3. It creates more capacity for you.
So if you are starting to feel like maybe you have a few too many 1:1 clients or you want to reduce the number of 1:1 clients you’re taking on so that you can move into leveraging and creating online courses and memberships, actually a price increase is a great way to do that.
Particularly if you follow this strategy, you will have a chunk of money come in in the short-term which can really help to settle down some of those income fluctuations that happen when you go into launching courses and programs.
So creating up a bit of space in your calendar whilst not necessarily decreasing your income so far can be a really good strategic move when you’re looking to go into that next phase in the online business processes.
4. You and your clients bring your A-game to sessions
I think this is probably the BIGGEST shift that I’ve seen since putting my prices up is that both I and my clients bring their A-game to the 1:1 sessions that we do.
Back to when I first started out, when I used to do this special where I do 2-hour session for $97, people would come along to that session and to be honest with you, they didn’t bring their A-game.
And also, when I was starting to get into the point where I was actually very popular and had lots of clients coming through, a special $97 session whilst I did my best, it wasn’t necessarily the absolute best.
So I actually find that the more that I charge now for my services, the more that I am making sure that I bring my A-game 100% to those sessions.
I charge $1,495 an hour now.
But also the people who turn up, they don’t come to the second session having not done their homework from the previous session.
And that is a significant difference.
I had a 1-month package that was $1,000. It had 4 sessions – 2 hours, 1 hour, 1 hour and 2 hours.
Several times, people came to their second or third session and they haven’t done their homework from the session beforehand.
So the more you increase your prices, the fewer people are taking that stuff for granted, the more they’re bringing their A-game to each session.
When I have a $1,495/hour client these days or when someone wins a free 1:1 session with me but they know that it’s normally $1,495 an hour, they turn up with their questions.
They turn up with their numbers from their business.
They turn up prepared.
And when I send them off with the stuff they need to do, they actually go an implement it.
So there’s a lot of different benefits to moving your prices up, particularly if it’s the right stage of business for you.
4 Steps to Increase Your Prices and How You Can Use It as a Strategic Opportunity
1. Come up with a plan
We want to know when is the date of your price increase.
You want to give people plenty of notice.
I usually say at least 2 weeks depending on how in touch with your audience you are and depending on how in-demand you are.
But you can do it all the way up to around 6 weeks – depends on how many people you want to make sales within that price increase strategy.
So what the goal is for you to sell a chunk of stuff at your current price by letting people know that your price is going to increase on a certain date.
Let’s say it’s mid-April now and you make a decision that your price is going to go up on 1 June.
You’re going to give yourself 6 weeks notice.
So your goal is to get as many people to prepurchase sessions between now and 1 June, and then have your price increase happen on the 1 June.
So Step 1 is to actually map out your plan and that includes your dates, what your new price point is (how much you’re increasing your prices by). The more you increase your prices by, the more people are going to purchase and be motivated by the price increase.
But the longer it’s going to take for people to adjust to the new price when you then go out and start advertising at that new price.
It’s kind of a balancing act when you’re picking your new price. I usually say go with your gut. Say it and take some deep breaths.
What feels good for you?
What feels really doable?
What starts to give you those little mindset wobbles?
Come back a little bit from there.
Depending on where you’re at in your pricing, I generally recommend that the increase is at least 10-20% of your prices.
If you currently charge $100, try and nudge yourself up to $125 if you feel comfortable with that.
If you’re currently priced at $200, maybe you can go to $250/$275.
So it’s a good little jump but it’s not like doubling your prices and completely freaking everyone out.
2. Start communicating that price increase
You want to make sure you’re getting it out to as many people as possible.
You’ve got your mailing list; you want at least two standalone emails to your mailing list just talking about the price increase for your 1:1 services.
There’s your Facebook Page.
There’s all the groups that you’re doing your offers and promos into.
Make sure you let people know that there are only two weeks to jump in and prepurchase your hours before your prices go up on the 1 June, for example.
So make sure that you’ve got a plan of where you’re going to communicate it and make sure you actually go and communicate it.
If you’re in the first 6-12 months of business – you’re just working with people 1:1, I recommend running a webinar.
Even if you’re further on the track.
There’s nothing as awesome as running a webinar, getting everyone in the room at the same time.
And your offer at the end of that webinar is to book some 1:1 time with you at the current price before the price increase in a few weeks time.
Or even if you do the webinar 5-10 days before your price increase, that’s a gorgeous way of getting that big chunk of sales in.
So, have a think about whether a webinar might be a great way for you to actually get out there and start communicating your price increase.
And the other one that I always say is don’t forget to send private messages and emails to those people who have already worked with you before.
Maybe you’ve got 20 or 30 people you’ve done single sessions with before who never jumped in to work with you for an extended period of time.
Why not send them a private email and say, “Hey! It’s been a few weeks/a couple of months since our last session. Just wanted to let you know my prices are going up on the 1 June for my ongoing coaching packages (or for whatever you want to call it). If you’re interested, let me know and we can work out a great package for you based on my current prices.”
Or, what I used to do is just make it a bundle of hours.
So my hourly rate is currently $97. It’s going up to $147. You can purchase up to 20 hours in advance, just send me an email and let me know how many hours you want and I’ll send you through an invoice.
Super simple! Super easy!
It’s how I had my first $20K month in my business in my 6th month of business.
It’s nothing to be sneezed at.
At that point in time, my price was going up from $147 to $247 an hour, and I presold bundles of 10 and 20 hours working with me to many, many people.
Some had only done a single session with me.
Some had been doing ongoing work with me.
Some had purchased the 5-hour package previously and they wanted to bump their hours before the old one had even expired.
It was a huge month for me and my business.
So you can see how increasing your prices can actually create some really significant results for you.
3. Support that mindset
Imagine what happened to my mindset when I went from $7,500 in November 2013 to over $20,000 coming in December.
It was a huge mindset wobble trigger for me, and it really started to freak me out.
I also made some very silly financial decisions based on that month.
I thought, “Wow! This is my new normal. We’re going to move to the beach. Davey, quit your job.”
We did all sorts of things after that month.
But, at the same time, can you imagine what was going on with my mindset?
So make sure that you’re really clear on what this means for you.
If you start to see a huge influx of clients, make sure that you’re tapping in to what’s going on.
Tracking your income every day.
Do some journaling every day.
Whatever mindset practices that YOU use and work for you, dial them up during a price increase strategy.
The other things I see people do is they start to communicate about a price increase.
They get a huge influx of people buying from them, or they get no people buying from them.
They decide it’s crazy.
They decide they’re not going to do it.
They don’t actually see the price increase strategy through.
Now, most of your sales are going to happen in that last week – probably in the last 48 hours before that price increase.
So making a decision to stop promoting, stop sharing, extend the price increase due date before you even got to the last 3 or 4 days is silly decision-making.
That’s a mindset thing. Make sure that you’re getting support to see that promotional plan through.
Don’t get yourself caught up in all of that negative self-talk.
4. The follow-through
This is also where I see people come unstuck a little.
They don’t actually do the price increase when they said they were going to do it.
They extend it.
They don’t follow up with people.
(All these people say, “Yes, I want to buy 10 hours.” And then they don’t actually send the person an invoice.)
I actually did that quite a bit when I did my price increases.
So someone was saying, “Yes, I want it. I’ll take 10 hours, please.”
And then I didn’t send them through the invoice for 6 or 7 days because there was so much going on for me with my mindset – I was spooking myself out, and I was avoiding it. It was just so much going on.
And some people, I sent them their invoice but it was actually too late; they had decided to sign up with another coach or they didn’t have the money anymore.
Or they decided to spend the money on a course or something else in the meantime.
So I actually lost quite a few sales by not following through and following up with people.
That also happened when I did send the invoice but then the invoice due date was the day of the price increase, and a couple of days before, I didn’t send through follow-ups to says, “Just a quick reminder: Your invoice is due in 2 days. Make sure you lock in that price.”
And so it created some awkward situations for myself where people were sending me an email 3 or 4 days after the price increase and going, “*gasp* I forgot to pay my invoice. Is it still okay for me to pay?”
And I was like, “Yeah, it’s totally fine. How about you just pay it by tomorrow?”
I was creating all these weird fuzzy boundaries and so people were taking advantage of that.
So you want to make sure that you’re very good with you follow-up and follow-through with people.
The other thing that I highly recommend that you do is once you’ve done your price increase, don’t stop doing your offers.
So the next offer day or the next market day in your group or in the Heart-centred group or wherever you’re advertising, do the offer at the new price.
You might think, “Well, I’m not going to make any sales so there’s no point.”
But what you’re doing is getting people used to the new normal.
The other thing that really bugs me is when people do like, “My prices are increasing on the 1 June.”
And then their offer on the 3 June is, “My prices are normally [the new price] but you can get it at [the old price].”
You haven’t really seen through that price increase.
And it’s kind of a spit-on-the-face for the people who did actually commit before the price increase date.
So if you’re going to do a price increase, stick with it.
Yes, you can do discounts but leave it a little bit down the track.
For most people, before the price increases, you’re going to get a good chunk of money in. That’s going to help you over until people adjust to your new normal.
It gives you some space and some capacity to deliver for those people who’ve purchased.
But don’t put your foot off the pedal in terms of your marketing and your regular activities to promote your services and your prices.
That’s my four-step price increase strategy.
I would love to be able to help you really implement this effectively.
So I’ve actually created a price increase workbook that you can go through to work out what your new prices are.
I’ve got some of those recommended places where you advertise and communicate it, some wording that you can use to promote your new prices.
It’s a really beautiful short worksheet that going to help you make the most of this opportunity.
The other thing that I just want to say is, if you struggle with managing your money, get some help with this stuff as well.
If you don’t follow the amazing money ladies like Laurie Griggs, Laura Elkaslassy, Delaney van Baalen. There are some amazing ladies out there that help you deal with the money as it comes in and make sure you’re setting yourself up for success.
Don’t make the mistakes that I did.
That $20K month, I spent a lot.
We want to make sure that this is going to give you a buffer so that the decrease that happens in your income after a price increase (because sometimes it does happen), we want to make sure that you can ride that out and you’re prepared for that and you’re keeping money in the kitty so that you’re not creating intense pressure on yourself 3 weeks after you’ve done your price increase.
“Oh no, I’ve run out of money to go and do more stuff.”
I would recommend that as well.
So check out at the show notes, I’ll put some peeps you can follow, some Facebook Groups to be a part of. I highly recommend the book Profit First. If you’re not familiar with that, it’s by Mike Michalowicz. (He came and spoke at the Heart-Centred Business Conference last year.) The Profit First is amazing. It helps you to ride the rollercoaster of your income.
I’m not a financial adviser but there are some amazing finance gurus in the #ladyposse, and I always recommend people. Follow them and make sure that you’re educating yourself on how to deal with that money when it comes in because a lot of people do this price increase thing, their income increases, they do the thing like me… I didn’t make this decision at a logical level. I didn’t go, “Ooo! This is my new normal.”
But subconsciously, “Well, I have a $20K a month business now. I’m just going to act like I have a $20K month business now. I’m going to spend like I have a $20K a month business now.”
There’s the extra tax that is going to come as a result of this. You want to make sure that you’re keeping some aside for the future, as I said.
So please learn from my mistakes. Most of my business coaching is me making mistakes so you don’t have to make them.
And make sure that you support yourself from managing your money as you go forward. Miriam Castilla is very good with that as well.
Managing your money as you go forward. Preparing yourself for the future. Be a good custodian of your money. And look after that mindset as well.
To grab that free workbook, go to tashcorbin.com/147 because this is episode 147 of the Heart-Centred Business Podcast.
If you’re going to do a price increase strategy or if you have any a-ha’s from this podcast episode, please come in to the Heart-centred, soul-driven entrepreneurs Facebook Group and share using #podcastaha #episode147 and let us know that you’re going to do it, you did a price increase strategy before and you realised that you didn’t do it effectively, the mindset wobbles are coming up for you.
Whatever is going on, come and share it into the group. That’s what we’re here for. Let us support you through that process.
There are some amazing, AMAZING entrepreneurs in that community who are ready and waiting to support you.
Until next time.
Thank you so much for listening to this episode of the Heart-Centred Busines Podcast.
I’ve been Tash Corbin. You’ve been a fabulous listener.
And I cannot wait to see you shine.
Bye for now.