In this episode of Priority Pursuit, we’re discussing something that scares arguably most creative entrepreneurs: raising your prices.
When you love what you do and you want to serve your customers well, it can be easy to charge less than you, your team (if you have one), and your business need and even deserve.
But, here’s the thing. As a small business owner, you likely work really hard, and you deserve to be compensated for all you do and for all you’ve built. And, as your skills and business grow, you certainly deserve to be able to pay yourself more, to work less, and to reward and build your team. (I mean, that’s the dream, right?)
However, unless you’re charging enough for your products and/or services, you’ll never be able to reach those goals. With this in mind, in this episode of Priority Pursuit, we’re discussing seven signs it’s time to raise your prices as a creative entrepreneur.
Before you simply raise your prices, you do need to know the minimum you should be charging for your products or services based on your cost of doing business and your personal needs (AKA your living expenses).
If you haven’t listened to “Episode 044: Exactly How to Determine Your Prices as a Creative Entrepreneur with Chris Deckard of Velvet Lotus Photography,” I highly recommend tuning in. In this episode, Chris walks you through how to calculate the minimum amount you have to charge for your products and/or services to make sure you’re able to cover all of your business expenses and meet your or your family’s personal needs.
Creative entrepreneurs often don’t want to do the pricing math, but before you raise your prices just to raise them, you need to know how much income your business needs to be bringing in so that your business can be profitable and so your revenue can cover both your business and personal expenses.
After you’ve done the math, a sure sign that it’s time to raise your prices is that there’s currently so much demand for your work that you’re having to turn business away simply because there aren’t enough hours in the day.
Now, one solution to combat this might be to add an employee to help carry the load, but even if you’re in a place where you’re ready to hire, if your calendar is full and people are more than willing to pay your current prices, most of these customers will stick with you when you raise your prices.
After all, you’re clearly offering a high-quality service or product that people want to invest in. And, based on the current demand, you know what you’re offering is worth more than you’re currently charging, and you can feel confident about raising your prices.
If you’ve recently invested in (or when you do invest in) new equipment or further education, you likely need to raise your prices.
As a photographer, I’ve made countless camera body, lens, flash, software, and other kinds of upgrades over the years, and I’ve also invested in workshops, online courses, mentorships, and various other forms of education.
While I do love new camera gear and learning new things, these investments aren’t for me; they’re for my clients. And, my pricing needs to reflect these investments, because they come with a cost and allow me to deliver a better finished product and experience to those who invest in my services.
The same is true for you, friend.
As you improve your products or services through new equipment or further education, know that what you’re producing is worth more, and don’t be afraid to raise your prices accordingly.
Another sign it’s time to raise your prices is that you’ve improved your client experience in some way.
Now, there are a lot of ways you can improve your client experience. For example, you could start sending your new clients welcome gifts; you could add an education piece to your client experience (e.g. Photographers can add a style guide.); or you could write an email campaign for your clients to receive as they work with you. The possibilities are endless!
But, elevating your client experience is certainly a reason to raise your prices. In fact, the quality of the client experience that you offer typically matters far more than the quality of your products or services.
I know this sounds counterintuitive, but the average person doesn’t know what makes a great photo or a great [insert whatever you offer here]. However, they do know how working or interacting with a business made them feel, and 86% of people are willing to pay more for a great experience.
As a creative entrepreneur, I know this can be hard to hear, but there comes a point where the key to being able to successfully sell your products or services at a luxury price or just a higher price point is the client experience you offer.
So, as you improve your client experience, you should also be raising your prices.
This next point might sound entirely backwards, but another sign that it’s time to raise your prices is that you aren’t making sales. If you aren’t making sales and receiving inquiries regularly but you’re serving your customers well and offering a great client experience, your lack of sales might be a result of being priced in the “dead zone.”
In other words, your current prices are putting you in limbo between two markets, and neither market is investing, because something just isn’t adding up.
For example, let’s pretend that you’re a wedding photographer who produces stunning images, and you have a strategic website and a strong brand. When comparing your prices to the prices of other photographers in your service area, you’re more expensive than one market but you’re less expensive than the next market.
As a result, when those with a lower wedding photography budget come across your website, they can’t afford you. However, when engaged couples with higher budgets find your website, they don’t inquire, because they’re confused about your lower price and are likely thinking, “How can this photographer’s work be so incredible and cheap? This has to be a scam.” And, this confusion prevents your potential customers from reaching out.
While what you charge should be based upon your cost of doing business and your desired salary, it’s also important to look at the prices within your market to make sure you aren’t unintentionally putting yourself in a dead zone, which can lead to lack of sales.
Speaking of looking at the prices in your market, another sign that it’s time to raise your prices is that your competitors are charging significantly more than you are.
Again, I’m not saying you should base what you charge directly off of what others are charging, but it is important for your pricing to be comparable to your competitors’ pricing for a few reasons!
In case it hasn’t been clear so far, your pricing needs to be based on your cost of doing business and personal needs first and foremost so that you can ensure your business is profitable. However, if your competitors are charging more than you are, that is likely a sign that you should raise your prices.
Last but not least, if you’ve reached a season in your career or in your life where you’re ready to slow down and work less, it’s likely time to raise your prices.
Again, let’s pretend you’re a wedding photographer. And, right now, you’re shooting 20 weddings per year. However, you’re feeling burnt out and need more weekends off. Or, you’re now a parent who wants to be able to attend Saturday soccer games.
Simply making less money may not be an option for you; however, if you’re offering a great service, there’s no reason you can’t raise your prices and make the equivalent—or even more—with just 15 weddings per year.
I know raising your prices and choosing to take on less work can be scary, but the point of working hard and building a business is arguably to be able to someday reap the benefits of your hard work, which in my opinion includes working less and making more.
Don’t be afraid to raise your prices so you can serve your clients, yourself, and your loved ones well.
If you identified with any of the seven signs it’s time to raise your prices that we discussed, your next question is likely, “How do I raise my prices without ticking off my clients?”
Don’t worry! There are a few strategies you can use to help your customers adjust to your new pricing.
If you’re realizing that you need to raise your prices substantially, I highly recommend giving your customers a little warning and a chance to purchase at your current price for a limited time.
Whether you send an email to your email list or simply share on social media, let your customers know that in [insert timeframe], you’ll be raising your prices. Then, give them a little insight as to why in a way that benefits them and helps them see the value they receive when they work with you.
For example, you can simply explain that it’s been a while since you’ve raised prices, but because you’ve furthered your education and invested in equipment that’s going to allow you to better serve your customers, prices need to rise to accommodate these changes.
Your customers will appreciate your transparency, and many will likely make purchases before your prices rise. And, even after your prices rise, you’ll likely be shocked by how many of your customers stick with you because they value what you offer and appreciate your transparency!
Another way to raise your prices is to raise them incrementally. For example, per Jasmine Star’s advice, I raised my wedding photography package by $300 every third client I booked until I got my pricing where I wanted it to be.
There isn’t necessarily a hard and fast rule about how often you should raise your prices or by how much, but raising them slowly but surely is an easy, unobtrusive way to increase your prices without catching your clients completely off guard. Plus, a slower price increase may also help you adjust mentally.
Another way to raise your prices and help your clients see the value of your work is to add value to whatever you’re offering.
For example, if you’re a wedding photographer wanting to charge more, you could consider adding heirloom wedding albums to your photography packages. This is going to allow you to charge and make significantly more money, while giving your clients more value.
Or, perhaps you’re a personal trainer. A good way for you to add value to your service might be to create a catalog of online workouts that your clients can easily access when they just want to get another workout in or can easily do while traveling.
The options are endless, but when you improve your products or services by giving your customers more value, they will understand why prices have increased.
Friend, I know increasing prices can be scary. But, here’s the thing. There is nothing wrong with being paid and compensated for your hard work, your talent, your creativity, and how well you serve your clients.
And, with more money, you can likely better serve your clients, your team, your loved ones, your community, those in need, and the world as a whole.
If you identify with any of the seven signs that it’s time to raise your prices, remember that you’re the only one standing in your way of generating more income. So, raise your prices!
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