Pricing is an extremely popular (if not THE MOST POPULAR) topic I discuss with peers, clients & within our social media manager community.
Money is clearly an important part of running a business, so it’s really no surprise that the question, “how much should I charge,” is on every service-provider’s mind…
Are you charging too little? If so you run the risk of burning out & resenting your clients.
Are you charging too much? If so you may be repelling your ideal client & missing out on quality leads
I’ve worked with my fair share of social media service providers & in my experience, most new business owners make the mistake of undercharging. I see this over & over again. Sometimes it’s because they just don’t know any better.
They have no frame of reference for what to charge or how to quantify what they’re doing, so they take a chance & slap a random price tag on it that feels “comfortable” — which is almost always too low. Or they may choose to charge a lower price than their peers because they feel like they’re not experienced enough to charge what others in their industry are charging… and that’s totally fair.
No matter how you got there, at some point, you’ll need to raise your prices. There are a few tell-tale signs that will indicate it’s time to increase what you’re charging, including:
When You Can’t Cover Operating Costs
Seriously, if you’re constantly in the weeds & can’t pay the bills, something has to give. In order to stay afloat, you need to increase your pricing ASAP. As a service-provider, you want to price your services so that you can pay yourself, your taxes & cover your business expenses.
When You’ve Reached a New Level in Your Expertise
If you’re learning new skills & techniques that you can incorporate into your client services, you can raise your prices to reflect that. As you continue to educate yourself, you can use your new experiences as a way to increase your rates.
When You’re Scaling / Bringing on New Team Members
By working with others, you’re adding value to your client’s experience. Raising your pricing to reflect the work of a team versus the work of an individual is a great way to transition into a higher pricing model.
Many of my clients know they’re undercharging, but struggle with pulling the trigger on a price increase. I get it, it can be scary to charge more!
There are a lot of factors to consider when it comes to your existing client relationships. And while the process of raising your rates will look different for everyone, there are some ways to make things a bit easier--and strategic!
For example, you can choose to raise your prices:
When You’re Launching / Re-Launching
If you begin to offer a new product or service or if you make some updates to an existing offer, you can use that as an opportunity to increase your pricing. Add your new pricing structure to your website then do a “re-launch” in order to debut your new packages & rates.
Use the Season / Increase Annually
The truth is the price of doing business increases each year, so why shouldn’t your prices reflect that?
You can use the beginning, middle, or end of a year to promote your seasonal pricing and let clients & customers know this rate will increase the following year. You can even use price increases as an incentive to work with you during specific seasons when things are slow (offer a deal on pricing in slow months & increase in busier months)
Increase with Each New Client
One of the simplest ways to increase your pricing is to do it gradually, as you become more experienced and gain more confidence. Your clients don’t have to know how much all of your other clients are paying-- so you can bump up your baseline pricing each time you bring on a new client until you’re comfortable charging more!
My point is, the rates you charge for your services right now won’t always be the rates you’ll charge in the future. There will likely come a time when you will need to increase them, and these are just a few ways to do it without it feeling daunting!