Have you ever felt like it was the right time to raise your prices, but held back?
Here’s something to think about:
We’re selling our time for a price: How much is your time worth?
There’s a lot of hush-hush about raising prices and we don’t talk about it a lot.
If you raise your prices, people will desert you– right?
People can be happy to pay more, because they want to keep you– you’re worth it.
The Power of Being Special
Let’s say you’re a mother of a 7 year old child who’s excited about starting piano.
Clara, the first piano teacher, teaches everyone and everything about music at her studio. She accepts students from age 4 to adults 65+, of any level, and offers piano lessons with theory lessons.
She teaches standard technique to everyone.
Clara charges $35 per hour.
The second piano teacher, Natalie, only accepts beginner students to her studio between the ages of 4 – 9.
She is an expert at building strong foundational music skills. She works with your child’s psychological development in music and nurtures your child’s creativity and confidence for sharing music they love.
Kids love her and parents come back telling her that their kids are more responsible about school work too.
Natalie charges $55 per hour.
From a mother’s standpoint, wouldn’t Natalie sound like the best choice for your child, even if her rates are more expensive?
How Much Will People Pay?
People will pay what they think you’re worth, and it’s up to you to create value for yourself.
Someone like Clara caters to everyone, but she actually loses business because she’s only alright at everything, whereas Natalie is an expert at one thing.
Natalie solves one problem amazingly and that’s enough for her to succeed, however much she wants to raise her rates.
When you figure out who you want to work with, be unique and recognizable for what they want.
- For example, my friend Reuel Meditz is known for modclass, a genre he invented, and he’s gaining fans fast.
- Another friend of mine, Dr. Noa Kageyama, uses sports psychology to help people overcome performance anxiety; he’s the only person I know who does this.
How to Raise Your Rates
“I just raised my rates and 99% of the time people wouldn’t question it. I went from charging $3,000 a website to $10,000 – not based on any specific principle – but because I knew that is what web design firms charged. Be bold, that will get you everywhere.”
— Maren Kate
The question isn’t whether or not people can afford it, it’s whether or not people are willing to pay the higher price.
They’ll pay however much you ask them to, as long as they think you’re worth it.
Ramit Sethi, author of NYT Bestselling I Will Teach You To Be Rich, says:
“The key to charging more is knowing how to properly convey your value.”
To raise your rates on someone, all you have to do is:
- Remind them of what you’ve done, and
- Plan out what you’ll do for them in the future.
Ramit Sethi also shares a great script that I’ve adapted below, something that I might say…
“The past 6 months of piano lessons have been great; we’ve progressed with a lot of skills– your phrasing is a lot clearer, x, y, and z… Now my rates are moving from x to x, and if you’re comfortable with this, we can start to work on x, y, and z. If you’re not comfortable with this, I can refer you to a couple of my colleagues who will be happy to follow up with you.”
Simple, yet effective. It reminds the client (in this case, the student) what you’ve done for them, and promises them even more.
“Won’t I lose ____ by raising rates?”
We all have this fear– students, clients, business, money.
The short answer is “no.”
Not when there’s no one else out there who does it like you do, and not when you do it right.
We’re talking quality, and when you offer things that no one else can– you’re valuable– then people will stick with you.
Let me know below:
(a) How often do you raise your rates, and how do you do it?
(b) A quick challenge: write your about 3 sentences for raising your rates right now, and discuss below.