Inflation is low these days, but still, every firm needs to periodically increase its fees. Maybe your costs have gone up due to increases in health care, overhead, or labor costs. Or perhaps costs aren’t that significant for you, but you’re realizing your fees are now lower than the going rate.
At Maxwell Money, we often see these factors eroding our clients’ profitability, especially when our clients have long-established relationships with their customers. Chances are you find it easy to onboard new clients at higher rates, but hesitate to go back to established clients and ask for more.
Don’t let this happen to you
We understand it’s not easy to ask for more. But we’re your champions, and we want you to know that you deserve to be paid for what your work is worth even if it’s more than your client is used to paying.
Increase the chances that your client will accept the new price
In working with many clients over the past three decades, we’ve learned that there are four things you should be consistently doing do to lay the groundwork and boost your chances of successfully increasing your fees and keeping your clients:
- Regularly thank your clients for their business
- Provide great service, always over-delivering on expectations
- Frequently solicit feedback on your performance and promptly address any issues
- Explain your costs so your clients have a better understanding of your pricing.
If you’ve already been doing these four things, you’re ready to ask for an increase. If not, you might want to hold off your request for more money until you’ve done all the above.
There’s also one optional thing you can do to enhance your chances of success: you can help justify the price increase by tying it to the addition of new features in your service offering. But be careful with this one. You don’t want the client to come back and say, “That new feature doesn’t add any value for us, so we’ll forego it and keep paying the old price. ”
Ask in the right way
Ready to go for it? Here’s how it works:
- You call or meet with clients to discuss the proposed increase
- You explain that increased prices allow for better service. You absolutely do not apologize. We can coach you on your pitch to make sure there’s no apologetic tone in there.
- Once you’ve spoken with them, we send a letter advising them of the increase in the current or next bill
When we send the first bill with the increased fee, we make a notation at the bottom so that they’re clear on the price increase
- When you engage new clients, we include a clause in the initial engagement letter saying that rates are increased annually or periodically, to set expectations from the outset, and make it easier to raise rates in the future.
We’ve seen over and over again that businesses are reluctant to raise fees. It can feel risky, but it’s necessary for your continued growth and profitability. With decades of experience helping clients to increase their fees, we can assure you that when the process is done right it’s almost always a success. We can help you get paid what you’re worth we’ve got your books.