Do This Before Raising Your Rates as a Service Based Entrepreneur
Raising your fees & prices is a topic that many entrepreneurs, freelancers and coaches find stressful to think about. So, what do we do? We put it off.
Even if you're totally ready to go ahead and raise your rates, it’s a big step. Lurking at the back of your mind are thoughts like, “What if my clients say ‘no’?” or, “What if no one signs up for my mastermind group?” "Am I charging too much?"
Well It's Time to Do Some Reconnaissance:
The first step is to know where your services and products fit in your market. This requires not only knowing your ideal client or customer, but also your competition. While you are not going to base your rates on competition alone, it’s important to know where you fit in in your market – and especially where your current pricing sits in the marketplace.
Let’s take a look at some common scenarios:
- You’re starving for clients. You check your competition, and discover you’re asking almost double their rates.
- You’re starving for clients. You check your competition, and discover you are asking well below your competitors’ rates.
- You’re swamped with clients, burned out, and stressed: They’re just too demanding. You check your competition, and discover you are asking well below your competitors’ rates.
- You’re charging a fair market rate compared to your competitors, but you just can’t make ends meet and you can’t possibly fit in another client.
Notice that in all these scenarios, a necessary step in identifying the problem is to check out your competitors’ rates and prices – as well as what they are offering.
There’s nothing wrong with doing reconnaissance to find out where you stand in relation to your competitors. Don't do anything questionable, like asking your assistant to book discovery calls with them but do spend some time properly researching what they charge and identifying why.
First, let’s look at why the previous four common scenarios leave you cash-starved.
If you are:
- Starving for clients and charging double your competitors’ rates…
o You may not be providing double the value
o You may not be presenting yourself as worth the extra dollars
o You don’t have a strong-enough unique benefit or difference to offer
- Starving for clients and charging well below your competitors’ rates…
o You’re telling your competitors’ clients (and everyone else) you’re not worth much
o You may not be visible enough
o You may have mindset problems
- Swamped with demanding clients who never seem to progress, and you’re asking well below your competitors’ rates…
o You’re attracting the wrong clientele completely
o You’re not respecting your own time, expertise and expenses
o You may have mindset problems
- Can’t make ends meet, even though you discover you’re charging a fair market rate and can’t fit in another client…
o You’re investing too many resources into your services
o You aren’t paying attention to your expenses
o You’re doing too much one-on-one and not enough passive income
The last scenario is really the ideal one to be in! If you’ve actually got a waiting list and you’re swamped, but you’re having trouble making ends meet, you can pretty much write your own ticket and raise your rates straight away – but first, provide passive-income versions of your coaching or other services, to train and prepare the clients on your waiting list how to be your ideal client, while helping them get there!
Ditto if your services or programs are the best they can be and you’re providing all the value you can provide, but you’re still turning people away. Raise your rates and get the ball rolling.
Don’t worry if that’s not you: We’re going to deal with the other scenarios too. In fact, by the end of my "How to Raise Your Rates Blogging Series", you’ll have a good idea of exactly what is stopping you from raising your prices, and how to correct that.
Check back on our blog for the next few steps you can take to get paid what you're worth and desire as a service based entrepreneur.
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