Are You Charging Enough?May 07, 2021
Last week, Debbie and Bertie discussed the sticky subject of money! And this week they are talking about when to increase your prices and whether you're ready for it?
Many people struggle to set prices in the first place, so putting them up can create all sorts of worries. Do you put your prices up with your current customers or just new customers? Do you email everyone to let them know? How much do you put them up by? Listen now for some interesting discussion and top tips about how to manage your pricing in your business.
Bertie: Good morning. Good morning, Debbie. How are you,
Debbie: Bertie? How are you doing?
Bertie: Are you doing I'm all right. Thank you. I'm a bit disappointed that we've not got summer yet. I mean, like it was frosty this morning. It was all that about
Debbie: yes, but at least it's supposed to rain all week and it hasn't yet. A blessing,
Bertie: isn't it
Debbie: it's been quite sunny here. Like we're not that much further away from each other, so I don't know. But yeah, it's sunny. It's okay. I thought it was going to be constant rain, but anyway, this is not a good
Bertie: may. Is it is, there is not a good mate. It's not a good mate. And I almost forgot that we're alive and talking to people out there.
So what we're going to talk about today? Well, welcome to Ted now. It's not 10 at 10 anymore. Is it? It's just one side's live Q and a every Friday. Yes.
Debbie: We're talking about how to put your prices up.
Bertie: Yes. Yes we are. But at the moment, so it's a common question, right? We're talking about pricing and an all pricing. Things last week. I think specifically now it's people say, you know, at what point should I put my prices up? We've had a question on your Facebook, you know, should you put your price to per year?
And if so, by how much? So I think we'll tackle all of those today. So if you've got any questions, comments, please walk them in there today and we'll tackle those. So Duda, do you want to kick it? Kelly's on pricing. Let's go for it. I think the
Debbie: thing is we've, we've had the discussion in the Facebook community or rung the blues, the blue stocking society.
We have a lady saying, I want to put my prices up. Everybody says I should put my prices up. Everybody says that my products are to cheap. I've looked at the competitors around me and my new prices fit in with that. But I feel bad about putting. So people are saying it's too cheap. She's now competitive with the stuff, but she has an internal, I feel bad.
And she was giving us lots and lots of reasons about why it was okay for her to put her prices up. It's your business, it's your business. And if your price is not giving you problems, You have to put your prices up and you don't need to apologize for it and make a ton of excuses. Like, that's the first thing.
If you need to put your price up, it's your business. And I think we're like, oh, it's because of this. And is that okay? And dah, dah, dah, dah, and people can come a bit with like a kind of apology. Like I'm really so in it's like, we need to run a profitable business. If you're doing stuff at a loss, it's not a business, it's an expensive hobby.
So that's my first thing, you know, Don't apologize for wanting to build a profitable business. If putting your prices up feels like the right thing to do intuitively follow your gut up. Like how much does it feel like it should be worth? Don't apologize for it. So it's funny that we were having that discussion cause I was like, oh, you clearly have a thing around money.
You need to investigate that, but Lee, you know, put your prices up.
Bertie: Yeah. I think that you've, you've raised so many things in that, in that a couple of sentences there. I think, yeah. Some people do have issues talking about money. I mean, everybody goes, I still, you know, still do to a degree as well. And especially when you're charging for yourself when you're charging for your own services, and this is what we're touching on last week.
Right. It's like, You forget the impact that you can have with some I've I've had some feedback just this week on not necessarily that I was undercharging, but I wasn't getting across the value of what my services were doing. It isn't just the hour of speaking to someone. It's all of the stuff that, that you sort of or the experience that you bring to the table.
So it's very easy to look when you're charging yourself. Think, you know, I'm charging this pots around hour. That's a lot, you know, that's as much as the lawyer or whatever. But it's, it's not just that, that they're painful. They're not paying for the hour of time that people are paying for something different.
So I think you've got to get comfortable with that first. I think if, unless you can't, you're never going to be able to increase your pricing anyway. Right. And that's specifically what we're talking about today. I think, you know, Increasing your pricing. It all depends whether you've got a product based or a service-based and what your supply versus demand is.
I mean, I've spoke to people who are literally run off their feets and can't fit any more customers in yeah. Still struggling to pay the bills. What exactly is it? You know, what, what do you do well, can you fit any more customers in? No. You know so the only logical thing to do. It's to put your prices up.
Now, the objection is when you do that and we've spoke about like, I can't remember, it was probably, I spoke so much this week. So your brain goes to the anomaly when you think of these things. So what happens in those cases they'll think, oh, well, Sandra pays me and she won't be able to afford that. For example, you don't think about all of them and you're gonna think about, so you are going to lose customers when you put your prices up.
It's unemployed. However, here's the math, right? If you put your prices up and you lose that, you put your price up by 20%, you lose 20% of your customers. Then actually, when you start to net that off, you are still making the same money with more free time. Now you've got a choice then. You've got a choice to either put extra customers in, in that free bandwidth or spend that time with friends, family, and do whatever when you call this to fail and it's okay to lose customers.
Some people aren't going to see the value and are going to complain about price rises, but don't worry about it because other people will see the value in what you're doing and still pay for it. And that's okay.
Debbie: Yeah. And we're not running charitable organizations for people. Are we, like, I see people and like you said, they're running at a loss and you're like, Because you are frightened that people can't afford your business will then maybe you need to run another business or, or do something else.
And I think it's back to that assumptions. Maybe your clients will be able to afford it. Maybe they'll maybe they'll be okay with it. What I often find is that clients will put their prices up. Everybody goes, okay. And then they're like, shit, why didn't I do this year ago? Like, ah, so that, so that, that that's part of it is that actually people surprise you.
And if, if it's much harder to go and find another supplier than to just go, okay, you're doing the job, you do it really well. You put your prices up, that's fine. And you're right. What we need to do in businesses, work out how to work smarter, not harder. It's kind of like, you know, work smarter, not harder.
And I have a client. I think we've had four sessions yesterday. He sent me a lovely email and the header of the email was like, you are truly an amazing coach. And I was just like, yes, yes, yes. I am like, he stumbled. He's got all of his clients on retainers. He used to work six, six days a week and evenings and never had a holiday.
He's now dumping his prices, got his clients on retainer. So, so he feels confident. He's working four days a week for five hours a day. He gets long weekends and he's taking holidays and saying, no, it's like, you can build your business whatever way you want to build it. And sometimes you just need somebody to give you permission to put your prices.
Yeah. So can you put your prices up? It's okay to say no to this clients when they're bringing out those hours, it's okay to build those boundaries and create a business that you want to create. And I think it goes back to like, well, What's your version of success, because if increasing your prices will give you a better life work balance.
If increasing your prices means you might have less clients that kind of quibble because they understand the value and they're just straight in there, then, then that's fine. And like we said, last week is weird. Like you can buy a bottle of wine for two quid, or you can buy a bottle of wine for 3000 pounds, like, and everything in between.
Yeah. If you feel like they need to be put up, just do it and you don't have to advertise
Bertie: for it. Yes. And that was the point I was going to bring in. And you bet, I'm glad you've said that. Joan apologize. And this is, this is often like, if we will start a conversation and it's a British thing, right? It's like, oh, I'm sorry.
I'm sorry. I'm putting my prices up. Already. It's like, you're making it sound like you're doing something wrong. It's, you know, it's very subjective on what you're selling, whether it's a product, whether it's a service, you know, whether you're doubling your prices or just putting them up 10%, whatever. I mean it was lower.
Wasn't it? Your west on your Facebook about how much is okay to put your price up every week. So every year.
And again, you know, it's very dependent on, you know on, on what you're doing and what you're selling, but a yearly price increase for a service based business is perfectly acceptable. I don't know, say, you know, 5% or 10% as in going out to all customers. For example, the way that I treat my pricing is a little bit different.
I generally do it on supply versus demand. So when I get to a certain. Customers, then I generally overall put my prices up, but only to new people coming. So the people who would still paying that takes, you know, exempted, like yearly price rise of again like five, 10%, whatever we'll still be on that tier.
When people leave that tier, I don't mean resell that price at the lower price. It just, it just frees up capacity, but then it goes into the new price and that's how I've tracked my pricing. So my prices overall have generally increased, but if someone's been loyal to me and been paying from the beginning, then they're still pretty much on the same way.
That gang and that's, that's how I work. My pricing and price rises, which I think is for.
Debbie: Yeah, I do the same. It's like, if you're on a legacy price, that's your price. And if you've been, I've been coaching you for four years and you're on the same price that we would have done an hourly rate four years ago.
Although some of my clients say, oh, I've seen your prices are up. Are you going to charge me more? I'd like you to charge me on there. Okay. I'll send you a new, you know, a new, a new link to sign up to the payment plan and that's actually happened. And that's lovely because then it's like, brilliant. You see the value when you you're actually opting to give me more cash.
And you would think that nobody would do that. But actually people, people do, because if you're you're in a relationship with somebody, when you buy something from them and you want them to be having a good time as well, because you want them to be there in the long term, you know chocolate from you know, local business and they put their prices up a little bit.
I'm like, great. I'm going to keep paying it because I want that local business to stay there because I love their chocolate. And I'm part of the brand story. And I want to support them. I'm not going to go, huh? God damn. It's like 30 P extra, you know, I'm gonna, I'm gonna, I'm gonna stay loyal to that brand.
And I think maybe, you know, if you do put your prices up, you could do it the financial year. Couldn't you around eight. Yeah, because at the time when everything becomes a bit more expensive, you know, my council tax is more expensive. Like petrol is more expensive. Like everything goes up in price and we don't go into the supermarket and go, oh my God, things have gone up four pounds and start throwing a wobbly in that environment.
We just accept that there are price rises and our customers will too. It's asked to put the emotional element in.
Bertie: Yeah, it is all about communication and transparency and things like that. And you know, just be really clear yet without apologizing.
Debbie: You could. I know some people, one of my clients makes these beautiful leather-bound notebooks.
So he sent a letter out to all his customers and said, the notebooks are going up in. However, you've got a month to buy the notebook at the current price, if you want to, or, you know, buying refills and stuff that gave him a surge in orders. And then his business is still profitable and new customers have carried on going.
So you can decide to keep customers and legacy prices. Do you give them a window to buy at that price? You know, do you let people know about your price rises or do you just rise them and not mention. You know, Heinz baked beans. Don't send out a memo to everybody going that to PG, but this year, you know, they just put the prices up.
So it's your business. So this is the thing, it's your business.
Bertie: Yeah. And you always, you always think that you will lose customers when prices go up. Yeah. And they don't, I mean, yeah. W putting up commission charges, I'm filling my belly from like 10 to 11%. You would think, you know that cause it's quite, you know, that's like a 10% price increase, literally like a couple of people complains, you know, out of like 2000 restaurants, it just doesn't it's, you know, but in your head it's such a big deal.
Cause that's going to have such a big impact on the business revenue that was essentially increase in the business turnover by 10% overnight. You know, something is impactful for that, but the consumers. You know, they weren't really that public, not the complainant, the restaurants. So sometimes you can create these scenarios in your head about all of this backlash that actually people don't care.
I mean, what you were saying earlier, Debbie, I think it's a real example. Sometimes if you've been with the customer for so long, you've helped their business grow. I'm actually thinking that should be paying. That'd be more. So that's almost an opportunity to to, you know you know, pay you for what you're worth facts, the impact you've had on their business.
Right. That's a good thing.
Debbie: The other thing I wanted to say is, The worry about putting prices up is based on fear. It's fear. Isn't it. It's a fear that all your customers leave you, that your business will fail, that you'll not be able to pay your mortgage payments that you'll end up in a cardboard box and you'll become a drug addict and then your die or whatever.
Your example of like worst case scenario is we don't want to create business decisions based on. Like that's such a negative state to come from. So we need to trust that people love us. We need to trust that. Products, our services give people value. We need to trust that people will be on that journey with us and not dig into the fear.
And really when you're feeling fearful, ask us, dig into that. Why am I fearful? What's the thing behind that? Can I like, can I, can I unpick that and look at that a little bit more? And the other thing about pricing is just put it up a little bit. You might not be able to just double your prices. You might not want to double your prices.
It might feel insane, but you can put up a little bit in each time you put them up. You know, building muscles, isn't it. You just get more confident. Oh, people will pay that. Oh, people will pay that. And you can just, you know, inch up little by little until you get to a point where you're like, this feels good.
I'm not overworked. I've got clients coming in. I can pay my bills. Maybe I can save for pension. Life is good. And that's what we want from our businesses. Isn't it? Life
Bertie: is. It is. And don't worry. It's, don't worry if some people. Do council, some people do leave. Like let's just say you had 50 customers and you lose three by putting your prices up.
You'll naturally think, oh shit, I've lost three customers that, what am I going to do to get them back? Like it was the worst. You've got 47 customers that have just accepted and agreed to that price rise. Right? Those three customers, there might've been other reasons they might've just been waiting for an excuse.
There could be something. And then there's some people don't deliver. Don't like delivering bad news. So they could be thinking about canceling for awhile and almost just needed you to give them something excuse in that prior to. It could have been any you're giving them permission. I think it probably isn't, you know, another British thing, we don't like open honest conversation.
We don't like difficult conversations. We you know, we will do anything to avoid that sort of stuff. So it's it's, but it's, it's always better. It might feel awkward and icky to begin with, just to have that conversation say, actually, Debbie, I'm putting my prices. But you know, having that, rather than just sending Debbie and invoice with, you know, with, with the, with the increased increased price,
Exactly. So it's always better to be it's always better to be clear and without being apologetic. Yeah.
Debbie: So no apologies. Put your prices up, have a good time. Release yourself from fear and build a business without.
Bertie: Exactly. Well, I hope that has been helpful for you today. That's all business fund size live is always, you know where we are.
If you've got any other questions, comments, but I've had do, do get in touch. Anything else you want to say, doodah?
Debbie: That's it. I'm done.
Bertie: Thank you very much for watching live. Thanks. If you're watching on the replay and if you're listening to the podcast, thank you very much for listening as well. We'll see you all again.
Next Friday, 10 o'clock for 10 minutes of Q&A here at the Business Funsize Live, goodbye!
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