Raising your fees can be a little scary, especially if you’ve never learned an effective strategy to raise them. So I’m excited to share with you my 7 Methods to Raising Your Fees With Integrity. This is part #4 in a 4 part series I am doing on raising your fees.
Here’s a quick recap of the first 3 parts of the series. In part 1, I shared the 4 Benefits For Raising Your Fees. With these benefits in mind, the next step in the process is timing, so you need to determine “is now the right time to raise your fees? So in part 2, I shared a short quiz to help you figure out if now is the right time to raise your fees. In part 3, I unpacked the 3 Most Common Lies We Tell Ourselves About Raising Our Fees and the 3 Tips To Overcome Them.
So if you’re still reading this, my guess is that you see the benefits of raising your fees, your timing to raise them is now and you’re ready to take action…am I right? If so, you may be wondering, “Now, how the heck do I actually raise them and do it with integrity (and not resort to slick used car salesman tactics)?”
Here are 7 options for you to pick from and find the right fit for both you and your clients…
7 Methods To Raising Your Fees With Integrity
#1 The Grandfather Method: in this method, your current clients stay at your current fees as long as they don’t drop off. All new clients pay your new, higher fees. If any of your current clients, who are locked into the current fees, choose to stop and then restart in the future, they will need to pay your new, higher fees. Be sure to communicate this clearly upfront…this gives them the incentive to stay with you and not “take a break”. This method also honors the clients who have been loyal to your (which I believe is extremely important).
Good for: those who want to honor their loyal clients, are unsure how their current clients will react to a fee increase or want a higher client retention rate.
#2 The Netflix Method: this method has some similarities to #1, but can create a more consistent cash flow situation for you with fewer headaches. Basically, your current clients stay at your current fees as long as they sign up for your auto-pay/auto-renew option. Similar to a monthly Netflix subscription, your client’s bank account or credit card is billed automatically each month until the client says stop. I wrote an entire blog post about the Netflix method, feel free to read more about it, Click Here. If any of your current auto-pay/auto-renew clients, who are locked into the current fees, choose to stop and then restart in the future, they will pay your new higher fees. Again, be sure to communicate this clearly upfront. If you have any clients who do not want to go auto-pay/auto-renew, they will need to pay your new, higher fees. This method is also another that honors current client loyalty.
Good for: those who want to honor their loyal clients, are unsure how their current clients will react to a fee increase, want a higher client retention rate and save time (and headaches) with client billing and processing.
#3 The Anchor Method: if you’re looking to significantly increase your fees and you don’t have a high-priced option or package yet, this method may be for you. To complement your current package, you basically create a premium, high-priced package (with new or additional benefits) for 2 main reasons. The first reason is too stop leaving money on the table. Statistically, 2-3% of your audience will want to buy your “Cadillac” package, which is the best possible option you offer and trust you so much that they’re likely to buy anything you offer (think raving fans). The second reason is that it serves as a “pricing anchor” for everything else your selling. Basically, any increase in your current package fee doesn’t seem as drastic compared to the fee of your premium one.
Good for: those who do not have a premium package or want to minimize the shock of a fee increase.
#4 The Health Club Method: if you’ve ever had a health club membership, you’re probably familiar with this one. Sometime in October or November, your health club puts up signs or sends out postcards or email with “Prices will go up January 1st, sign up for this special deal before the end of the year to avoid the rate increase.” They set a regular annual rate increase, strategically, during a time where their service is in the highest demand (in this case, New Years). This strategy gives current members an incentive to take action before the rate increase (which rewards loyalty) and also make the client less likely to go shopping for another health club in the New Year.
Good for: those who want to set a regular, annual fee increase or have 1-2 time periods per year of high demand and other periods of low demand.
#5 The New Box Method: this method is really effective if your niche is flooded with competition or if you’re offering very similar packages as your competition. When you boldly raise your fees and your packages look similar to everyone else in your niche, your prospects and clients will likely compare your fees directly to everyone else (which can devalue what you offer, which we don’t want). Here’s an example…if you’re a social media manager who triples your rates from $500/mo to $1500/mo, the prospect or client might have a hard time swallowing paying triple from you when they perceive they can get the “same thing”from anyone else in your space (even if in reality, you provide much more value than your competition). Perception is there reality. Basically, they are putting you in the same box as everyone else. Here’s the solution…change the box. Create a new and unique package with new or additional benefits. This method will allow you to better set your fees more in line with the value you are providing your client and not be stuck in the box.
Good for: those in high-competition niches or ones that use similar packages.
#6 The Group Method: this method is stellar if you are currently offering 1-on-1 Coaching, Consulting or “Done For You” Services (meaning you take care of all of the implementation of what you’re teaching or recommending). You can create a group coaching program that teaches them what to do and/or how to do it, but the client is in charge of the implementation. With a group coaching program in place, you can aggressively increase your 1-on-1 or “Done For You” fees and still offer help at a rate that is equal or less than what they are currently paying
Good for: those who want to start working with higher paying clients, but still offer help to current clients who are not ready to pay your higher fees. Also, it is a great option for new clients who may not be ready to pay your higher fees, but allows them to grow with you (and hopefully be higher paying clients down the road).
#7 The Nike Method: this method is for those who know they are worth so much more than the fees they are charging and are confident that most of their current clients will stick during the increase. There is not a ton of strategy with this method, you just follow Nike’s mantra of “JUST DO IT”. You decide on your new fees, make the announcement and move forward with whoever is on-board.
Good for: those who have a waiting list of potential clients who want in or who are leaders in their industry.
2 quick questions for you…
- 1. Which of the 7 methods fits best for you and your clients?
2. On what date are you going to start communicating your fees changes?
P.S. If you would like some help raising your fees, my 6-Figure Freedom program may be just the thing for you. It’s the signature program that I created to help smart, successful digital marketing consultants get to 6-figures, fast, and spend more time with their family.
Chris Rudolph is a husband, father of 3, and a Freedom Business Coach for Digital Marketers. He specializes in working with those who are underpaid, hustling around the clock or missing out on valuable family time build their own Freedom Agency. He helps them grow their income, scale with a team and enjoy more time with their family.