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?
Nope.
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.
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Great article, Grace! I wanted to add that another useful technique when raising rates – in line with your point about the power of being special – is to grandfather in existing clients. When you let existing clients keep your old lower rates, it shows that you appreciate their business and makes them feel like they’re getting a great deal. Existing clients (not new clients) are the ones who could potentially get upset about a rates increase, so when you take care of them in this way, you’re then more free to experiment with raising your rates without having to… Read more »
Thanks for sharing, Evan. That’s also a great technique if you’re raising your rates nominally, but it’s definitely smart to keep one set of rates across the board in case you find yourself trying to pull several sets of rates together when the gap gets too big. Musicians deserve raises too. How often do you think we should raise our rates as musicians?
Two occasions come to mind:
1. When you’re charging less than other musicians who provide the same service in your area (e.g. wedding pianists in Austin)
2. When you’re overbooked – If you find yourself turning down perfectly good gigs due to lack of time, why not charge more, play the same number of gigs and make more money! :)
Just my 2 cents :) What do you think?
Sounds good! It’s all about knowing what you’re worth and conveying this to everyone else. It takes a bit of trial, but we all come to a comfortable place eventually. :)
I am at full studio capacity and now one of my students just won a provincial (equivalent to a US state) award. This past week I’ve had 3 different families contact me about lessons and all I can offer are some odd-ball times that start before school lets out in the afternoon. I’ve been considering a significant (25%) rate-increase and the two conditions above tell me that this is the time. I’ve been quoting the new rate to the families who have just contacted me. I hope this will let me know how the new rate will be accepted before… Read more »
Awesome to hear, Beth!
Although I don’t know how your new rates compare to the average in your area, I’d be hesitant with “testing” the new rate on new students and determining if you should go up based on that, because if you’re offering value to your existing students, they’ll likely stay with you because they know you’re worth it.
It seems like you and your students have been doing great; I’d go for the increase because you deserve it when you think it’s time. (Going about it gradually is a good idea too.) :)
Just a follow-up, both families signed up right away (back in January) & are now continuing in the fall. One family is adding an older sibling & no one has questioned the cost. I am down to only 1 available spot & there’s still over a month to go before the Fall term begins. I have quoted the new rate consistently to new families & I haven’t heard a questioning word from any of them (granted, if they were discouraged by the rate, they probably didn’t email me back).