It's the end of a long day, you worked your butt off on client projects, and you decide to review your financials. For the past couple of months, you've been working long hours with a booked-out calendar, yet lo-and-behold, you’re still not hitting your financial goals, even after all of that effort.
What the heck??
Are you tired of working 24/7 on your biz without the cash flow to show for it?
It might be time for you to raise your rates. In fact, it's essential for all growing businesses to raise their rates over time. Because let's face it: if you don't, you'll be on a one-way ticket to burn-out town. Or worse, won’t be able to pay your bills!
If you’re thinking to yourself: “What if a price increase turns off potential clients?” This blog post breaks down the top 4 things to consider before you pull the trigger to raise your rates.
1. Know your numbers
Your pricing structure shouldn’t be based on the whims of emotions. This needs to be numbers-driven and strategic. Let’s chat more about strategy. First, dive into research. Take note of your target market and current clients. Are you attracting your ideal clients or saying yes to every project that comes your way, even if it’s not a good fit? We’ll talk more about attracting your ideal audience in the next section.
Next, analyze your profit margins with your current price points. A profit margin represents what percentage of sales has turned into profits. The higher the number = the more profitable the business. How much are your monthly recurring expenses? Which service offerings are the most and least profitable? To calculate these numbers, track how much time it takes for you and your team to complete various tasks (ie. how long it takes to complete a custom brand identity project). Then, compare the investment from your side to the money made. It might be a smart decision to remove the least profitable service offering so you have more time and energy to focus on marketing the most profitable service offering to your audience.
Last, investigate how your biz stacks up against your key competitors. Also known as a competitive analysis, this report will help you determine if your biz is seen as a “commodity” or as a “luxury” in the market.
For more information on how you can use quantitative data to price your services for profit, download our free Price Your Services Checklist here.
2. Know who you want to attract
In the book How Customers Think, Harvard professor Gerald Zaltman says that 95% of purchasing decisions are based in the client’s subconscious mind. Do your clients consider you in the “bottom of the barrel” tier or in the luxury-offering tier? Your low prices might be attracting clients that disrespect your expertise and try to nickel-and-dime you.
If you’re looking to attract better quality clients, a higher price point could be your solution. When you make the switch to premium rates and position your biz as the best at what you do, you’ll attract clients who value your unique offering.
3. Improve the perceived value
If you’ve never heard of the term “perceived value” let me break it down for ya: perceived value is a client’s personal assessment of a service’s benefits.
Think about it this way: what unique results do you deliver for your clients? That special piece of magic that has clients in your inbox wanting to work with you?
Your past clients are a great resource to pull here. Ask them to identify a shining moment they had from working with you. You can also ask your current clients what helped their decision to ultimately book with you?
After you’ve collected that info, you can plaster your perceived value everywhere to attract your ideal clients.
First, vet your website, social media, and marketing materials to make sure your value is obvious. Seriously, make this as clear and simple as possible! Don’t be afraid to shout about what makes your biz unique all over your website and social media channels. Then, improve your marketing materials and sales pitch to better explain the problems your service solves for your clients. When your clients clearly understand how you'll solve their pain points and deliver a ton of value, a price increase becomes a no-brainer.
4. Create high demand
Want to be booked out for the next 2-3 months, get a ton of referrals from past clients, and only have a few project slots available in your calendar?
Our free masterclass was created specifically for brand and web designers to help them reach that coveted high ticket level.
In this masterclass, you’ll learn…
What’s holding you back from financial success and scaling (and what to avoid)
How to price your services in order to reach your long term financial and lifestyle goals
How raising your rates will scale your biz to the high ticket level
Still unsure if this masterclass is for you? Tell me if this sounds familiar…
You’re not making the money you want from your existing client projects, but you don’t feel “good enough” to charge more
You don’t have enough hours in the day to tackle your to-do list, and suffer from “this is just be faster if I do it myself” syndrome
You are so ready to finally stop feeling like an imposter and start playing in the big leagues
I’ve been in your exact shoes, and I know how frustrating it can be to burn the candle at both ends while still struggling to pay rent. I took my studio apartment side hustle (where I was majorly undercharging my services) to a luxury design agency with over $30K months in just 2 years, and now I’m here to show you how to do the same.
In the High Ticket Designer masterclass, you’ll learn the keys to building a sustainable business at the high ticket level, so you can expand your team, invest back into your biz, and live a lifestyle full of travel, quality time with family, and fulfillment.
Watch the free masterclass here.
