KickStart: Benefit from our current run-away inflation rates to justify your new (large) price increases.
In ‘normal times’ (is there such a thing any more?) I’m a huge proponent of small (3% to 4%) yearly price increases. Here’s why:
1) A small yearly increase will ‘fly under the radar’ of your clients. (Most customers can’t remember what they paid last time.)
2) The power of compound interest means over time you will ‘painlessly’ raise your pricing AND your profits! Remember, Steve Toburen always tells his students: “All other things being equal… its better to have LOTS of money instead of having NO money!!”
Sadly, some of my clients haven’t been raising their prices (even a little bit) every year.😲 If this sounds like your company are you condemned forever to a marginal, low-price business?😥 Fear not!
Here’s how to catch up by benefiting from these ‘abnormal times’. Inflation is currently running at a 40-year high and your customers know this! First, you and your accountant should do a deep dive into your financial reports and then…
Dramatically (but SELECTIVELY) raise your prices… now!
Steve’s ‘Secret Sauce’: Make inflation the ‘Bad Cop’!💲💲 When and IF (most won’t) a previous client utters these dreaded words: “Isn’t that more than I paid last time?” your company will be the ‘Good Cop’ when you calmly reply…
“Yes, Mrs. Jones, sadly on March 22nd we were forced to raise our prices for the first time in ___ years.” (Pause here and wait.) Almost invariably your past customers will say, “I understand. So, when can you fit me in?”💖
Pro TIP: Whatever price increase your financial analysis comes up with tweak it into an ‘odd percentage’. (This will be much more credible when justifying your higher pricing.) For example, instead of a 20% price increase make it 19.2% or 21.4%.
RESOURCE: In our 3-hour, online SFS: ‘Winning over your caller’! LIVE seminar I share a complete “Booking Previous Residential Clients after a Price Increase” Phone Script.💲💲💲 You’ll pay for your entire class with the first recalcitrant client you ‘Win Over’!👌
However, notice the word “SELECTIVELY” above. Seriously, analyze your past production numbers over the last year. With some services you may just be ‘trading dollars’ or even be losing money! After all, you may not have focused on my 8-point Diversification Checklist before adding a new service!
So, you may need to SUPER dramatically raise your pricing on some services! Yes, you may lose some clients but remember that these are profit-sucking jobs!🙄
True, with some other peripheral, non-synergistic services you may decide to eliminate them completely. Or you can refer these less-than-desirable jobs to a Strategic Partnership. (Possibly even for a commission.)
Let’s talk soon about some ‘Profit-Sucking Candidates’ that may very well be an unseen cancer in your business.
Steve