I have an established service/business I have been running for years, and I am considered an expert in my field. I am rebuilding our very old site, which will have many new features and a membership aspect. Unfortunately, my pricing has remained the same over the last several years, and I have always given away more for free than I should have from a business standpoint. I want to make this a viable business model and compensate myself for the time I pour into it. The new site launch brings so much to the table, but it will also cost more to maintain. How do I raise my prices without losing my customers? How do I price our new products without pricing them out? There is no one else who provides this local service.
Here's three tips: 1. Increase the value you provide more than the price. If you want to lift prices by 10%, give 20% more value. 2. Rename you products. This will remove the association with the legacy pricing. 3. Craft an awesome pricing communications strategy. I've had clients that have done both 1 & 2 above, then finished the communication to customers about those changes with the line "we understand if you need to go elsewhere" and they have never lost clients. Good luck!
A few options:
1. use AB testing: show different prices for the same service (either using different pages), or if not possible, show one price for 1 or 2 weeks, and another price for the other 2 weeks, and so on (3-4 times) until you find the ideal conversion price.
2. Use a survey for existing clients - ask them how (much) they value your business - you might be surprised for the better. Don't forget to offer an incentive for people who take the survey.
3. Raise prices, but add something to the new offer - even if seemingly small to you. this way, they are paying a bit more because they're getting more (which makes it feel justified to them) and not just because you raised prices.
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High level, there are two ways you can go with this: Subscription model or payment for individual transactions/access to content. Subscription sounds like the best model here.
Judging from what you write, membership is a new thing for your site. So you should be free to price it as you want to. But remember, that whatever price level you are currently at, will serve as an anchor for your existing customers.
Also know, that no matter how much more you bring to the table, if you are too expensive, your current customers will look for alternatives. But it could be, that you are really better served by having a smaller volume of customers, if they just pay more.
My first step would be to understand on an individual basis, who your customers are, how they use your existing service, and how you think they will use your future service. Do phone interviews, surveys or something like that. If you are alone with this service, your customers should be loyal, and willing to offer their opinion to you. After that, you can decide on a viable business model.
Feel free to contact me, if you would like to discuss this further. I offer first call for free.
Good luck with the expansion!
To charge more you need to convey more value. Let’s be honest, it’s probably very much a concern of yours that you will lose some paying customers. It reminds me of an old consulting joke about a barber. Consultant is getting a haircut and says “you should double your rates” The barber says “double my rates?! I’d lose half my clients!”
Understanding the value you provide and the clients that get the most value from it will help you differentiate yourself from others offering a similar service.
By thinking from your customers point of view you can understand the value that they get from the website and double down on that. You could even survey a portion of your most profitable clients and ask them what’s important to them. Then focus on improving that aspect of the site.
Hope that helps! If you have a strong niche, a strong value proposition and provide more perceived value with your updates then you could probably charge more than you’d think.
You need to understand the market and your competitors. Then you need to show your differentiated value of why you can up-charge and what your customers will get for that. If you want to brainstorm ideas on your products and services, I am happy to help!
How do I raise my prices without losing my customers?
If you are provide tremendous value to your customers; If you are helping your customers to get the results they are aiming for; If you help your customers to generate more make money or/and reduce their cost
You should definitely raise your price by 2X, 3X or 4X for the services that you are the EXPERT, the reference!
Please understand that by raising your price you will lose some customers...But ask yourself are these really your customers or you are their little b*tch?
If your customers can't value your services as an expert and Nickel and Dimes you. Send those customers to your competitors ;) Maybe is about time for you to find new customers that respect your time, skill and talent
Example: I prefer to deal with 10 clients that pay me 10K each than 100 clients who are paying 1000$ each.
How do I price our new products without pricing them out?
It depends what you want to do!
There are two streams in your own words
a) You want to increase price per unit of your time
b) You want to monetize freebies
However from the words above I understood that the justification of increasing price is the new site that will have additional expenses to maintain.
I am also assuming you business is to providing services
Increasing the price based on the changes in site can only be so much ( means very little) depending on how important
for your customers is visiting of the site. Services business is more of Word of Mouth spread and repeat customers do not tend to value up scaling of sites much. If your customers come to your site to avail / buy services then upscaling of the site can be redeemed to some extent. This extent is limited to
a) either increase in value the customer gets from the services ( in your case None)
b) customer perceives additional costs / inflation : This is more applicable to you however the increase is limited to inflation factor only (1-2% in developed countries)
So I my suggestion to increase the rate (per unit of time) can be equal to Two inflation cycles (e.g combined inflation of 2 years)
However your biggest monetization is Freebies. this is where you have the scope and this can be based on Freebie or based on Unit of time. We can discuss Freebies and their monetization if you like
make up for it with humanity and a level of soft skills that builds trust and demonstrates team togetherness
One of the points of raising prices is to lose customers.
Less customers * higher prices == less work + more profit.
You might enjoy reading Dan Kennedy's "Price Strategy" book.
Don't waver. Be firm in your decision. Present to your client how your services can benefit them. Also this helps you in narrowing down your niche of ideal clients.
As entrepreneur freebies are a good way to attract people. Hence I would recommend
- Differentiate between your core products and side products. Much like what WinRAR did, There customers were both corporates as well as personal users. They made the software freely available to private users to avoid piracy and increase adaptability while targeting the Corporates for revenue that drove their business. The Freebie model was useful for them. The same cases are used by other companies where one product drives the profit while other products are there to attract customers.
I can help you more if you can tell me more about your business.
First is you have to identify and study your market. You do not want your efforts to be put nowhere that is why you also need to raise your pricing considering the following factors:
1. If the market price (purchasing cost) increases
2. If you expenses related to your business increases
3. If you think your business is not looking competitive in terms of pricing (I mean psychologically, people think that when your price is quite higher that others, your business is more quality)
4. If you are not profiting.
It's important to understand that when paying for something that is not a commodity, people don't pay for the perceived value. If your clients understand you give them great value and they trust you and have been working with you for a long time, they will pay the new price.
If prospects understand the value you give is greater than the price they will pay the price.
If you solve big problems you can have big price tag.
I suggest talk to your current and long time clients, be open about it, and tell them you'd like to get their impact on something. Ne real and genuine and see what their reaction is
To raise your prices without losing customers keep the following things in mind:
The best time to raise prices is when you are sure customers are satisfied with your product or service. Consider what you could throw in with your current product or service that would cost you little or nothing but would have higher perceived value to the customer. You can do this for almost any retail product, from cosmetics to candles. However, if customers do notice, this tactic can backfire. You can avoid raising prices on your actual product or service by adding fees. Utility companies do this all the time, and many smaller businesses used the tactic when gas and electricity prices soared a few years ago. Better quality fabric in the clothing you manufacture, new menu items in your restaurant or even new packaging for your product can help justify a price increase. Offer discounts to cancel out the price increase. When you raise prices, you may lose very price-conscious customers. To keep some of them, raise your prices, but offer occasional discounts and deals that bring prices down to their original levels. While frugal customers will use these discounts, less frugal customers probably will not bother, so you’ll still get plenty of people paying full price, while keeping your bargain shoppers happy. Bundle products or services.
Soften the pain of price increases by offering new bundles of products or services. For instance, if you own a nail salon and need to raise the price of your manicures, pedicures and foot massages, add a bundled mani/pedi/foot massage service in which each of the services is offered at a discount compared to its a la carte price. Target a different customer base. If you need to raise prices drastically, you may need to go after a new, more affluent customer base.
Even if your price increase is modest, expanding your target market a bit to more upscale customers or businesses with bigger budgets can be a smart way to offset the customers you may lose. If your business is service-based, such as a B2B company, lawn-care business or cleaning service, your customers expect price increases from time to time. If your services are provided on a month-to-month basis, offering a six-month or year-long contract at a lower cost than the month-to-month rate is a good way to lock in customers who want to avoid the price increase. You cannot keep all your customers happy, and when you raise prices, you are bound to upset some of them.
Be prepared to explain why you are increasing prices, both in person and on social media if customers complain there. Raising prices may not be easy, but these tactics can make it as painless as possible for you and your customers.
Besides if you do have any questions give me a call: https://clarity.fm/joy-brotonath