How Do You Raise Your Agency's Prices?
What changes when you raise prices?
I’ve raised prices on service businesses many times now. Often, when service businesses (I’ll use the term agency/agencies interchangeably here) start out, they price themselves low in order to get market share (aka, customers).
What many then forget to do, or are too scared to do, is raise their prices eventually.
When you raise your prices, things change. Often, the fear of raising prices comes down to fear of two things:
1. The unknown (what might change that I don’t know will change)
2. The conversations with existing customers/clients
The second one can be easily solved by not raising prices on them, and then giving them a reason to pay more via additional services etc. For example, if you only have a service fulfillment offer, would they pay you for consulting calls as well? If you only offer landscaping services, would the same people pay you for mowing (and by proxy you end up charging them “more” for the same landscaping services?)
The unknowns can also be learned. How? You learn from someone who has done it before.
There are 6 things that change when you raise prices:
1. Your design and messaging need to be better and clearer. Prospects with more dollars require more trust to even contact you.
2. Your sales process needs to be tighter. You need a format for sales calls, and a sales deck that you can easily update as you give demos and receive feedback and questions.
3. You’ll have fewer sales demos. If you’re used to 10 sales calls a week, expect five (5). Don’t freak out over this.
4. You’ll close more deals, as a percentage. If you’re closing 20% of deals with low prices, you’ll probably close 50% now (or more). I’ve even seen people (myself included) close the same number of deals with half the number of calls.
5. Your customers/clients will be happier and stay longer. They value the service more, so if you’re any good at what you do, they’ll stick around longer because they’re valuing the results more and not expecting them straight away. The old $500/mo client saying they need the world from you and yesterday, and the $50k/mo client saying “wire sent, thanks” comes to mind here. Because they are happier, they’ll also refer others to you more often if you ask them to.
6. Your customers/clients will give you more feedback, which will help you improve the service even more and thus charge future customers even more, because your service is more valuable!
Raising prices is only a win for almost all service businesses and agencies. I have never seen an agency raise their prices so much that they stop getting clients/customers. They may get fewer customers, or the same customers may stop buying and the new customers look a bit different, but that is ok!
You make more, it takes less time and effort to fulfill, your customers value the service more, and everyone is happier.