Having effective pricing strategies is one of the most important things for your business on your path to success.
That’s why we showed you earlier 15 effective pricing strategies you can choose, depending on your business.
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However, when you’ve decided to incorporate one or more strategies that involve raising your prices, you will face a new challenge:
Getting your clients to agree to the new prices.
After all, they’ve been enjoying your lower rates for a while now, and it’s been fine for them. Why should they pay you more today for the same thing that cost less yesterday?
This is the type of question you’re most likely to receive, and if you’re not prepared, your new pricing strategy could fall flat.
You could just introduce the new pricing for new clients and grandfather the old ones in. However, there is a better way.
You need to negotiate with your current clients about your new prices. You may not get what you want, but it will be much better than what you have.
That’s why today we’ll look at the best ways for you to negotiate pricing with clients so that you both come out satisfied.
#1 Come up with the “Why”
One of the biggest parts of a successful negotiation is being able to communicate exactly why you need something—in this case, higher prices.
If you are trying to convince your clients that you need to raise your rates, first come up with the why. Telling them that you just want more profit probably isn’t going to cut it.
The reasons could be many. They could include the general economy and inflation. Or that your supplier’s raised their rates, or the transportation and shipping increases.
You could also explain that in the time that you’ve worked with the client, your experience, skill and speed have all improved significantly. They get more work for less time.
Therefore, your value is higher than when you first worked for the client.
#2 Give specific examples
Another important part to negotiating with your clients is to be as specific as possible in explaining how you’ve helped your client.
For example, above I mentioned how you can discuss your own improvements as a reason for why you are increasing your rates.
Continuing on with that line of thought, you can explain (and show, if possible) how you’ve developed and helped your client throughout your time together.
For example, if you’ve been able to produce A+B in one hour of work, but now can do A, B, and C in the same amount of time, it would be convincing.
You can also show specific examples of the ROI for the client, how it’s improved over your time together and will continue to improve.
#3 Be confident
This one may seem like a wishy-washy method, as it doesn’t get really specific, but I’d like you to hear me out on this one.
I’m not asking you to be confident because of your client. I’m asking you to be confident because of yourself.
If you believe the reason you come up with (from point #1), then you should already have a good amount of confidence. After all, the truth is quite good support.
When you are confident, you’ll tend to speak more convincingly and come up with better arguments. In that way, you’ll simply be more convincing and have a higher chance of success.
#4 What are your steps after failure?
First of all, if you succeed, good job!
However, looking at the fallout of a negative answer can be daunting. You may fear failure and want to avoid it (you should want to avoid it), but you also need to prepare for it.
Essentially, you may be OK with the prices that you have now and simple desire to have a higher price. If you fail, you won’t lose your client—you just won’t get what you want (but not need).
However, if you need to raise your prices but fail in convincing your client, then you may have to consider other options. Is the value of the customer now bigger than the value of another customer at a higher price (combined with the probability of finding that customer)?
For example—the time you’re dedicating to your current client, would that be better served working for (or looking for) another client?
That’s a question you’ll have to answer yourself, but you shouldn’t go into a negotiation without first preparing for both results.
With these tips, you should be able to get your clients to agree to your new pricing. If not, then you have to decide what’s best for yo and your business.