3 Reasons To Raise Your Rates ASAP
Let’s have a conversation about RAISING YOUR RATES.
In my book, Rich20Something, one of my recommendations for getting your first few clients is to do work for free or at an extremely reduced rate so that you can demonstrate your expertise, get great case studies/testimonials and eventually, referrals. This is a great strategy for beginners.
However, once you have been in the game for a while, this strategy no longer applies.
Here are 3 reasons why you should raise you rates…starting TODAY.
1.) Your rates act as a filter for the types of clients and customers you are looking to attract.
If your average retainer is $1,000/month, that price point is going to attract a very different type of client than if you were to raise your rates to $2,500/month, even if you are essentially providing the same service. And the effect on your business is counterintuitive.
Relevant Video: 3 Lessons From My First $20,000 Month
You might think that the people who pay you more are going to be much “needier”…but in reality, clients who pay more typically understand the value they are paying for better because in order for them to pay those rates, they probably have more established businesses themselves (in B2B transactions). These clients, on the whole, are going to be much more pleasant to work with.
(I hit these concepts in-depth inside of my course, Start Your Side Hustle w/ Foundr Magazine.)
2.) Raising your rates allows you to deliver a superior product.
You may be under the assumption that raising your rates will scare clients off…and this is true to an extent. However, the money you make from raising your rates will make up for any clients who drop off, resulting in you actually having fewer clients of higher value.
This gives you more time, energy and attention to deliver a better product. That makes for a much happier CEO (you).
Relevant Video: How To Find The Perfect Business Idea
3.) Raising your rates is as much a psychological game as it is a practical one on your end.
When you raise your rates, you begin to take your work more seriously. When my first agency, Primal Digital, raised our retainer from $1,500 to $3,500 per month, I began to look at my business like a truly valuable asset, not just Daniel’s personal hustle.
It allowed me to hire better talent and I further distanced myself from the daily tasks that were sapping my energy. I was able to step into the role of CEO, and stop wearing all the hats. My confidence exploded because I knew that other companies really valued the service we were providing, and this pushed me to work harder.
Relevant Video: 7 Client Acquisition Methods
It should go without being said…but I’ll say it anyway: you must be able to provide a stellar service worthy of increasing your rates. And it doesn’t have to happen all at once. You can test new pricing gradually and raise it over time.
My general rule of thumb is, if your potential clients are saying “yes” to your pricing too readily on your sales calls, there’s room to increase.
Hope this was helpful!
Are you planning on raising your rates this year? Leave me a comment and LMK!