How can I raise prices on my existing customers without losing them?

Hello, this is Laura Lee Rose – author of TimePeace: Making peace with time – and I am a business and efficiency coach that specializes in time management, project management and work-life balance strategies. I help busy professionals and entrepreneurs create effective systems so that they can comfortably delegate to others, be more profitable and have time to enjoy life even if they don’t have time to learn new technology or train their staff. I have a knack for taking big ideas and converting them into smart, sound, and actionable ideas.

At the end of the day, I transform the way you run your business into a business you love to run.

Today’s comment came from a busy professional and an entrepreneur:

How can I raise prices on my existing customers without losing them?

We launched our startup initially with all inclusive one-price packages for our services. As we grow, our operating costs can no longer be covered with the current prices we have set. I want to make our packages more expensive, and then offer custom pricing for customers that might not need everything we offer in our packages. Should I only raise prices to new customers, or can I raise them on my existing customers?

Raising Prices

Without fully understanding your current price structure (i.e. is it a one-time fee, or subscription based), it’s hard to give you a definitive recommendation. But here are some thoughts.

Certainly offer the new pricing to the new customers. That’s a no-brainer.
Clearly establish your new pricing and explain the reasons for the changes to your current clients. At this point, you can elect to treat each existing client differently. But everyone, at this point, is aware of your new pricing and feature list.
Determine if the individual client is fine with the new pricing arrangement. Don’t offer a discount until you know that the pricing is a roadblock. Why give a discount when the client is fine paying the new price.
If you find that the pricing is an issue for the current client, offer a Loyal Client discount and/or a grandfather period (3 months or 6 months at the original rate) on an individual basis.
If you find that pricing is still an issue, work with them to eliminate features that they are not currently using, to fit in their current budget. This keeps the value of your services high, while accommodating their budget constraints.
If you payment plan is on a subscription base, consider implementing expiration dates on each subscription (6 month or 1 year subscriptions). When the subscription expires, you are free to revisit your pricing and feature list with this client.

Making more of this opportunity

You can also use this opportunity to increase business.

Create a campaign around your upcoming price-hike. Explain why you need to increase your prices, and then promote a limited-time offer to get in on the original lower-price.
Set a grandfather-price expiration date, in which new clients can lock in this rate for three, six or eight months. This “lower-price” lock-in rate would include all features but then after the grandfather-price date expires, some of the premium features become inactive. This allows the client to keep the base-line package at the “original rate”. To get the premium features back, the client upgrade to the new prices.
Offer your loyal clients a Loyalty/Referral Program such that for every friend that becomes a client, the loyal client receives 3 more months at the original price.

Conclusion:

Regardless of the situation, you can often attack the issue on multiple levels. In this example – “raising pricing” doesn’t necessarily result in “losing current customers”. In this example, you can use a “price increase” to your advantage by incorporating customer appreciation solutions, referral programs incentives, and scoping package features to fit client’s budget.
If you need additional help on this topic, please contact LauraRose@RoseCoaching.info

I am a business coach and this is what I do professionally. It’s easy to sign up for a complementary one-on-one coaching call, just use this link https://www.timetrade.com/book/WFSFQ