ep022: How to Raise Your Prices… Without Pushback

How to Raise Your Prices... Without Pushback!

 

 

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It’s normal for you to feel apprehensive when you want to raise your prices or implement significant changes in your wellness business. This fear may stem from concerns about losing clients or receiving pushback from them. However, overcoming this fear is crucial, as taking action can ultimately help build confidence and empower practitioners to make positive changes.

In this episode, I share my own experiences with fear and reassure listeners that it’s a normal part of the process. I encourage practitioners to take the first steps in implementing a campaign for raising prices, noting that as they move forward, their fear gradually turns into empowerment. By focusing on the potential benefits to the business and clients, practitioners can transform this anxiety into enthusiasm for their new pricing strategy.

In this episode of the Business (R)Evolution Podcast:

  • Discover the art of raising prices with minimal pushback to grow your business.
  • Uncover the significance of communication and its impact on fostering client loyalty and community.
  • Grasp the essentials of pricing for a sustainable business model that strengthens profitability.
  • Learn the magic of effective campaign approaches when increasing prices to incentivize clients.
  • Realize the power of focusing on client benefits (WIFM) to create a robust business.
  • And more!

Resources and links Joanna mentions in this episode:

Joanna Sapir is a business strategist and coach helping innovative wellness practitioners build more profitable and sustainable businesses. She's on a mission to build a movement of people creating a new vision and reality for our future as humans on earth.

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Full episode transcript

(00:01):
In this episode, I’m talking about how to raise your prices without pushback.

(00:17):
Welcome to the Business (R)Evolution Podcast, where practitioners and coaches that provide services in health, wellness, and education, come to learn the business side of things like marketing, pricing, hiring, finances, all the things you need to streamline and organize your business, create steady and predictable income, serve your clients even more deeply and reach your full potential as a business owner.

If you are a skilled, experienced practitioner of your craft that has or wants to have a profitable and sustainable business doing the work you love, you’re in the right place and I’m so glad you’re here. Let’s get into this episode.

(01:00):
Okay, so here we are. In this episode, I’m talking about how to raise your prices without pushback, and my original title was How to Raise Your Prices Properly. When I say properly, it implies that there’s an improper or wrong way of doing it, and I actually think there is. The way I usually see any service-based businesses raise their prices is in a way that I don’t think is a good way. Usually, it’s done with a short curt message simply informing their clients and community that prices are going up. It’s short and direct.

While I’m generally a big fan of being direct and to the point, I think that when it comes to communicating something like a price change, which is a big deal, right to your clients and community, this is something that’s really going to impact both them and you. I think that this is a huge opportunity for you to build community, to build loyalty actually, and to build connection.

(02:01):
I think that opportunity is missed when you do it in that standard short and curt way. In this particular context, I think that doing it that way, you risk severing relationships, you risk getting that pushback from your clients and severing relationships with your clients and community when it’s so short and pointed and lacks an expression of care and gratitude and an explanation, a glimpse behind-the-scenes of why you’re raising your prices and how it’s going to impact everyone involved and as you’ll hear me talk about, how it’s going to impact them positively.

So in today’s episode, I want to share with you my recommendations for how to raise your prices in a way that does show care and gratitude for your clients and your client community, and can potentially even create stronger bonds and connection with your clients.

(02:53):
Now, an important point, what I’m going to share with you today is also how you would make the transition from selling sessions to enrolling clients in programs and treatment plans. So if you’re new to me or to this podcast, then you should know that I believe you get better client results and have a more sustainable business when you stop selling sessions and start creating programs or treatment plans for your clients.

For more information about that, I recommend you go check out episode four, which is called Stop Selling Sessions and Start Creating Programs. And of course, I’ll link that for you in the show notes. When I’m teaching people how to do that, many practitioners who’ve heard me teach about that ask, how do I make that transition? How do I transition my existing clients from a session-by-session approach to programs? What I’m sharing in this episode is also applicable in that situation, in making that transition.

This is an actual outline of what I help my clients do when they’re making these transitions from selling sessions to selling programs or changing their prices or any major transition you’re making in your business.

(04:05):
It may be a physical move. It may be all three of those things together. You may be moving your location, if you’re brick and mortar, that is, you may be transitioning to programs, you may be rising, raising your prices. All of those situations are how you can use this process that I’m going to lay out. I’ve done this multiple times myself in my businesses and I’ve guided, I don’t know, over a hundred practitioners through this process.

So today I’m going to share the basics of how to raise your prices properly without pushback and or change how you deliver your services in a way that builds community and connection and shows that you care.

(04:50):
Okay, so there’s several reasons why it might be time for you to raise your prices, and I want to get into this right now. One reason is if you didn’t price your services properly to begin with. So I discussed that in a previous episode called the Three Biggest Pricing Mistakes Practitioners Make.

One of those mistakes is looking around at what other practitioners are charging and basing your own pricing on that. I go, in that episode I go into like why that’s an issue, again, I’ll link to that in the show notes. You can go find that. Another mistake in pricing your services that’s going to hurt you in the long run is selling your services, pricing your services by the hour or the session.

You’re selling your time basically, which is not a sustainable model. Again, I explain that in the other mistakes in that episode so if you haven’t already listened to that or it’s been a while, you might actually want to watch listen to it again or listen to it for the first time.

(05:43):
In that episode, I also share how to properly price your services. Your pricing has to take into account the cost of running your business, which includes all of your business expenses each month, and your monthly salary and your profit goals. So you don’t want to have a business where you’re barely breaking even each month or one where you only get paid what’s left at the end of the month. That is not a sustainable business. You deserve better and you can make it better. Ideally, you have a business that allows you to live the lifestyle you want in terms of both how much you’re able to get paid and how many hours you work and your pricing is a key tool of making that happen.

(06:29):
Another reason that you may need to raise your prices, and the reason I wanted to do this episode right now is because cost of living has gone up. Here in the United States, we have the Social Security Administration and they look at the rise in consumer prices each year. They’re looking at the rise in prices of things like housing, food, and energy costs, and they use that to create a number they call the COLA, the Cost-of-Living Adjustment.

In the last year, so I’m recording this right now, in June, 2023, well, from February, 2022 to February, 2023, the recommended cost of living adjustment from the United States government was 8.7%. That is actually a huge jump. That means that the price of goods, the cost of goods and services has gone up on average 8.7%. The reason that that administration, that department puts that number out is because they’re trying to tell employers that wages need to go up that much too.

(07:35):
Now, you own your own business, you decide how much you get paid. So to keep up with the increase in cost of living, essentially inflation, you likely need to raise your own pay. Plus, the actual costs of running your business have most likely gone up as well because of this inflation. These are some very important reasons too, why right now may be the time to raise prices in your business. You may simply need to to keep up with that, but yikes, that’s scary, right?

Raising prices feels scary to most of us. The main fear that usually comes up for a business owner is, what if I lose my clients? What if they’re not willing to pay an increase and they jet? If you have people-pleasing tendencies, this is probably a really big fear. Like what if people judge you or they don’t like you because you raise the prices or you get actual pushback, that conflict. And people pleasers tend to be conflict averse, and that’s scary. So that’s the head trash you may be contending with.

(08:40):
I want to say something here. I want to say that this is a time that you cannot let the fears win and hold you back from taking forward steps in your business that are essential to not simply your survival, but your success. You will struggle in your business if you let your fears hold you back from taking action.

Because listen, here’s the thing. When you take action, even on the things that you’re scared of, you discover that taking action is the very thing that transforms your fears into confidence and feeling empowered. Doing the things that you’re scared of is what builds confidence and builds your resilience. So you can’t just sit and wait and until you feel confident to do something, it’s doing it that creates the confidence.

(09:39):
Okay, so now let’s look at how to raise your prices properly. We’re going to think of this, the first piece I want you to know is we’re going to think of this as a campaign. It’s a campaign to inform and educate your client community about the changes that are happening and to invite them to continue being part of your community.

And just like I said at the beginning of the episode, you can do this for any big changes in your business. This is, especially useful for when you’re transitioning from selling sessions to selling programs, and as I said, of course, raising your prices, the main topic of this episode, and like I said, changing location, there might be any other big changes. So think of it as a campaign, a campaign to inform and educate your client community and invite them to continue being part of your community.

(10:32):
Okay, so step one in this process is if you’re raising your prices is first you need to calculate your profitable pricing if you haven’t already done that. I do have a calculator for you to do this, it’s free. I’ll link to the download for that in the show notes on my website and the pricing calculator, there’s a video that goes with it walks you through calculating your profitable pricing. First you need to come up with that.

Step two is to get out of calendar and decide on the timing of your campaign. So here’s what I recommend. I’m going to recommend something extended. If you are truly just changing the prices, you could shorten the timeline of your campaign but if you’re transitioning to programs, I’d recommend going with this timeline that I lay out.

(11:12):
So you decide when the price change will go into effect officially, for real, like effective date what. Then you’re going to back that out four to six weeks, which is the time period that you are implementing the campaign. So in that time period of the campaign, what you’re going to do is send one initial letter to kick off the campaign. That can be a hard copy mail to them, an old snail mail if you want to do it, or email or both, your choice.

Now, in that four-to-six-week campaign period, you’re going to send at least one reminder or follow up email as well, at least one. And then if you’re doing the, if you’re actually changing things in a way that’s going to require that your current clients opt in to some new way that you’re doing things, then you may need to set up a process and maybe even a meeting or conversation with each of those people to support them in making the best decision for themselves and to officially opt in to the change.

Does that make sense? Again, if you’re working directly with me, I help you design and implement all of this piece by piece. If that sounds exciting to you want my help, just reach out to me. That was step two. Step two is to decide on the timing of your campaign. Effective date, back it out, four to six weeks.

(12:30):
Step three is to prepare your letter. This is your big announcement, your big, your big announcement, your big letter sharing with the folks. This is the most important part of the campaign, and I want to introduce a really important concept for all of your marketing because this is a form of marketing.

We would call this internal marketing when it’s going to your existing community. This really important concept is that in all of your communications, whether with leads and prospects or directly with clients, in all of your communications, you always want to position information to show what’s in it for them, what’s in it for them. Now, marketers will often abbreviate this as WIFM, W-I-F-M, as in what’s in it for me.

(13:16):
So the what’s in it for me is not me you writing, it’s me. You want to think in terms of them, what’s in it for them. Just really basic concept always in all of your marketing, again, whether it’s broadly to the public or internally to your clients, that’s how you want to position it.

And just a really little tip of the trade here is that the more often you are writing about like, and using the word I, talking about yourself, that is far away from positioning it for them. You want to be speaking to them, and you want to actually comb through your writing and go, how many times am I saying I this and I that, and I this? Go take that out and change that. What’s in it for them?

(13:58):
So here’s what you want to include in that letter. You want to create a sense of community. We’re talking about you want to make clear that your business is something bigger than just your one-on-one work with them. If your service is all based on one-on-one work with your clients, well, they’ve never met each other, and so this is an opportunity for you to actually create a sense of community, which maybe you’ve never had. So if none of your clients have ever met each other, you can be speaking to them and explaining that they are part of a community of clients.

(14:42):
The next piece that I want you to include in this letter is gratitude, expressing gratitude. So you are saying, I’m so grateful that you are part of my client community. That’s one sentence way to say it, but this is something you probably want to elaborate a bit. This is something that you want to include in that letter. It is likely something you haven’t done in the past.

So create a sense of community, something bigger than just your one-on-one time with them, if you’re a one-on-one service, and express gratitude, what are you sincerely grateful for? Are you grateful for your clients? Are you grateful for the time you get to spend with them? Are you grateful for the impact? Like what are you grateful for regarding your business? Truly express that.

(15:31):
Something else you want to include in that letter, you want to, and this is an order, you want to have a section where you review what the business has been able to do since it’s been open. You want to review and kind of brag about all the accomplishments and contributions and impact it’s had on your clients and on your community. This is like looking back. So you might say, you know, the name of my business, whatever it is, this business has been in, we’ve been in business for five years serving this community or working with these people and in that time, we’ve done what, X, Y, Z.

What are all the accomplishments, contributions, impacts you’ve had? Are there any awards you’ve received? What are the things you’ve done internally to serve your clients better? Like play it up. This is really a chance for you to acknowledge to yourself as well, all the wonderful work you’ve done.

(16:25):
Next, so now we’ve reviewed the past. We’ve started with gratitude, created a sense of community, next, we’ve reviewed where the business has been. Now you’re going to look ahead and share what your plans are for the business. What’s your vision? What do you plan to add or create or achieve in the near future? I know all of you listening, I know you have great ideas and plans that you want to implement, share those. The thing is your changes and your price increase is going to be what helps you achieve those.

A lot of our plans are going to require some capital to invest to get them going. It might be a new piece of equipment or a new tool. It might be adding an extra treatment room, is any number of things. Look ahead. What do you plan to add, create, achieve in the near future?

(17:21):
Okay, next. Now we’re essentially doing, it’s almost like a pre-justification for the change in price, for the increase in prices. So you’re going to state the changes. You’re going to say, in order to continue providing this great service that I just reviewed, what you know I provide, and in order to implement these wonderful new plans I have, you’re going to say it requires that we’re going to increase the prices. You need to do this without whining, without blaming. You need to take full ownership.

This is a positive thing that is going to allow you to serve people better. So you’re stating it somewhat matter-of-factly. Again, you’re not going to complain about inflation. You’re not going to complain about the taxes in your city or state or province or whatever it is, no whining or no blaming. You have just laid out all this beautiful narrative leading to this and this is the dotting the eye at the top of the tee.

Next, you’ll provide the specific dates and what specific action, if any, they have to take and by when for this to happen. So if they have to opt in for something or choose something, you’re going to give them the date by which they need to do that and let them know how. And it needs to be very, very clear instructions for them.

(18:47):
So step four is to complete the campaign. Step three was drafting that letter and sending it. Step four is completing the ca campaign and that is sending any reminders leading up to the date of implementation and setting up any meetings needed. So let me explain to you just a little bit about like how this looks in real life. I’m going to tell a story from my first business rather than a client story, but just want to say, I’ve done this with many, many different clients.

My first business was a strength and conditioning gym. The first time I did this, first of all, I did it three different times over the years, the first time I did this was when I not only increased my prices, but it was the first time I was changing to a programmatic approach. So I had previously had a month to month membership, and I was changing from month to month to three, six, and 12 month memberships and I was raising the price, prices.

(19:46):
I put out this wonderful letter laying out where we had been, all our wonderful accomplishments, our growth in community, our growth in impact, our, the wonderful results our clients were getting, et cetera. I looked ahead and projected like what I was planning to add. There were some classes I really wanted to add, there was some new equipment I wanted to get, I wanted to bring in some specialists for some things.

I was very excited about all that. Then I say, and in order to do all that and serve you better, again, what’s in it for them? This is all positioned around serving them better and providing them better results, which it really was and should be for you. The thing is possibly simply paying yourself more is going to allow you more time and space for downtime, for example, which is going to allow you to serve your clients better.

(20:36):
So I need you to understand this is about serving your clients better. Even if your most simple motivation is for you to get paid more, that is still going to result in you serving your clients better. So put out this letter. In this case, what happened was the clients, because they were on month to month, they had to choose a three-, six-, or 12-month commitment. So they could opt out entirely and decide to no longer be clients, or they were choosing now for the first time a three-, six-, or 12-month membership.

I had to have a date by which they had to inform us and that everybody would be rolled over onto the, a new membership at new prices. So what I did was I set up what I said in the letter was, well, I’m going to have a one-on-one check-in with every single one of you to help you decide how you know what you want to do moving forward. So I set up a system for that for them having those check-ins. Some of them were just by phone and some were in-person and we just check by check, person by person went through and made sure they had made a decision one way or the other.

(21:43):
Now, I will also note that we gave an incentive. We gave a special incentive, and this was something that I was, it was recommended to me by my business coaches at the time. So I’m just going to share it here because we did it and occasionally with clients. Now that I’m working with, this is something they opt to do, it’s not something I recommend for everyone, but I’m going to mention it because it might be useful for you in that context of my gym, changing to that.

What we did was we said, there’s, here’s a special just for you right now, which is if you pay in full for a 12-month membership, you can keep the old price. So what that did, first of all, I just want to note why this isn’t always appropriate for people is it’s a tradeoff, it’s a cash tradeoff.

(22:30):
So if you could really benefit from quick influx of cash, then it’s worth doing, but if you don’t need an influx of cash, you have pretty decent cash flow to begin with, then you’re actually giving up higher income in the long run. Does that make sense? Because people who opt in are paying the lower rates rather than the higher rates. So you would only do this if you know you’d benefit from a cash influx all at once.

So let me tell you what happened, and this is very much in line with what I’ve seen happen in all the, I mean, just so many businesses I’ve helped do this with. In my case, I remember, this from this first time, this is many years ago, but I remember it, we had five people in the membership take that incentive and pay in full for the whole year. So we got a big cash injection. So that was just fun.

(23:26):
But what’s really fun about that is you know who the people are who are like, of course, I’m all the way in. I’m there. Now as for everyone else, almost everyone committed for the long term, a three, six, or 12 months, I think the vast majority to 12 months, but I don’t remember those numbers exactly.

What that meant was, at that point in my business, for the first time ever, I had monthly projected income a whole year into the future. I had, it may not have been enough income, but I had actual, like 11 months from now could tell you how much money was going to be coming in no matter what, if I made no new sales. Does that make sense? That’s part of the beauty of having of building programs like this.

(24:09):
And your biggest fear, losing clients, well, I did lose a couple clients, and you know what, this always is what happens is that the very clients that you do lose, if you lose any in this, are the people that you were happy to lose. You may not realize that now, because right now your fear is just losing people and you might be thinking in terms of that’s like income, but when the people who leave actually leave, if you lose anyone, you actually will likely feel a sense of relief that those are the exact people that may have been taking up more time and energy than you wanted, or not getting the results you wanted your clients to be getting.

It always just works out for the best. That’s what I want to say. The other thing is that even if you do lose people, you generally don’t lose income because of the increased cost of your services going forward. So usually, the increase in your prices makes up for any loss of clients that you did have if you had any loss.

(25:11):
So that’s it. That is how to raise your prices without pushback or how to make big changes in your business without pushback, particularly the change of selling sessions to creating programs. Now, if you are still selling sessions and don’t know how to enroll clients in programs or treatment plans, and maybe that sounds exciting to you, but you don’t know how to design those programs and you don’t know how to market them, you don’t know how to sell them effectively, then I may be able to help you.

My special abilities happen to be in creating easy to follow systems and processes for you to get high quality committed clients that you love working with, to serve your clients more powerfully with thoughtfully designed programs and processes to help them reach their goals, to create clear step-by-step systems in your business that attract leads and turn them into committed clients, and to achieve a consistent, predictable five-figure monthly income while still having time in your schedule to prioritize your health and your personal relationships, and even take vacations.

(26:18):
Overall, I am here to help practitioners feel more energized and fulfilled than they have in years, finally feel like they’re living their purpose at the level that they know they can and to make good money doing it.

So if you’re not experiencing this yet in your business and you want to, and you’d like some help with that, I invite you to schedule a discovery call with me. You can do that at joannasapir.com/discovery-call. I will totally put that link. You should see that link in whatever podcast player you’re listening to this in. In a discovery call with me, I look at where your business is right now and what your goals are, and I make recommendations for what exactly you need to do to reach your goals.

(27:00):
If you’re a good fit for my services, we spend the last part of the call talking about what it would look like to work together so you can make a decision about whether that’s right for you. Again, you can find the link to that call right here in your podcast player, or at my website at joannasapir.com. I hope to hear from you.

If you’re looking for help, please reach out. And I hope that this episode got the, got the wheels turning about raising your prices, about the need to raise your prices and maybe take advantage of making other big changes that are going to help serve your clients more deeply and make your business more sustainable and resilient and profitable. Okay, bye now.

(27:43):
Hey, if you enjoy listening to this podcast and you want to apply what you’re learning here in your business, did you know that you can meet directly with me and ask me questions and get my help when you come to the Practitioner’s Business Roundtable?

The Practitioner’s Business Roundtable is a free gathering for innovative practitioners that I host each month. We meet live via Zoom and when you sign up for a spot, you have the chance to submit your questions beforehand, to get them answered by me at the round table discussion. You can grab a seat for the next Practitioner’s Business Roundtable by going to joannasapir.com/roundtable. Let’s go deeper. Come learn more about how to build a fulfilling and profitable practice with long-term clients and stable income. I hope to see your face there.