How to Have a Positive Conversation About Rate Increases

If you are a service-based entrepreneur, updating and restructuring your prices and packages is key to continued growth, employee (and your own) satisfaction, and even client happiness.

Yes, even client happiness. Increasing prices may not make them smile when you share the news, but it will allow you and your team to put more focus and dedication into their work. It’s inevitable that the costs to run your business will increase year to year, so you need to keep up with the changes from all sides.

If you’re worried about telling your clients about rate increases because of how they may react, here are five things to keep in mind to have a positive and successful conversation:

  1. Be confident and value the work your business provides. Remember, it’s about the value the client gets. Remind them what you’ve already accomplished together.
  2. Give them a notice of your price increase – ideally three months. This way they won’t feel caught off guard and the trust you’ve built isn’t impacted.
  3. If it is not a yearly increase, rather because the scope has grown, explain why you need to raise your prices. Don’t list reasons out line by line, rather explain that increased rates will allow you to improve turn-around times, availability, and results for them as they will get even more of your focus.
  4. If you are increasing because a specific tool the client requested is increasing their prices, then share this information with them.
  5. If you want to increase the retainer past just yearly increases, identify areas where you can add more value, small or big. Is there anything else you can be doing to make them happier and closer to their end goal? Make sure it is something they will actually want and see value in and come prepared with what’s included, the value they will gain, and the costs they can expect. Don’t forget the option to have a strategy session to hear directly from them about their needs and current challenges in other areas of their business.

Another way to make this seamless is by including yearly rate increases in your contracts, this way no one is caught off guard when it happens. 

Keep in mind you don’t want to overload them with information or make it seem like you feel you need to explain why you are raising your rates. This goes back to confidence in your business, offerings, and value provided. 

Stay strong. And don’t forget, a client doesn’t want to spend time nor resources vetting and onboarding a new team. 

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Looking for assistance in evaluating and updating your pricing and packages? We’re here to help PR, marketing, and service-based agencies! Visit Agency Owner Lab to sign up for a Single Focus VIP session.

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