Afraid to raise prices? You're not alone. Especially if you are a consultant, you will encounter several symptoms indicating you should increase your rates such as:
- overwork and exhaustion
- disinterest in current projects
- concern that the future will simply be more of the present
- experts at a higher level telling you to raise them
- desire for more money and dissatisfaction with current revenue.
I have been there. And I have done what I'm about to share with you several times in the past few years--and am about to do it again.
When you develop any sort of competency at fulfilling a product or service, you need to raise your rates. If you don't, you won't be able to leverage that competency into more money. And you deserve more money!
Afraid To Raise Prices? Here's Why
This is typically the first barrier to increasing your prices. You do not truly believe you're worth it. It's head trash: one or more limiting beliefs you have that are blocking you from growth. These beliefs are hidden. When you bring them out into the sunlight, they vanish; but their power comes from operating in the darkness of your subconscious. So explore these recesses: Why do you feel you're not worth more? Who told you that? Roll it around until you have the answer--and it will melt away.
Having to serve many clients is exhausting. You split your energies among too many projects, and don't accomplish any of them spectacularly. Let me tell you from personal experience: when money is off the table and you are relaxed, your performance is much higher. So if you keep your prices low, the kind of customer you attract will remain one who needs a ton of hand-holding and will split your effort in so many directions you won't do much good for anybody.
By increasing your prices, you reduce the number of customers you need to meet your revenue target. You can laser focus your energy and effort. And that is what gets you and your client transformational results.
But you're afraid to raise prices.
Even though you intellectually see the sense and value of doing so, your mind and gut scream, "NO! Get me out of here!" Even if your belief system allows you to feel you deserve the increase. So what the heck is going on?
It's all about your comfort zone.
Afraid To Raise Prices: How Your Comfort Zone And RAS Combine To Stop You
Bleah. Comfort zone. Probably one of the most poorly understood and least favorite of business and self-help phrases.
This is the problem, though: you have to shift your comfort zone. Right now, as a competent fulfiller of products or services in a certain niche, you are comfortable. You know the people in your marketplace. You know their features. You know the indicators that say, "Yes! I am a candidate for help from you!" You know their jargon. You are familiar with solving problems at their level.
Frustration quickly sets in when you do realize the price increase is necessary, but in your quick glance around for better customers you don't see any.
Of course you don't!
You still have your blinders on.
Yup, blinders. We all have them. Me, too. We unintentionally get caught up in a comfort zone, and our blinders come on so we don't see anything else other than the kind of thing we're looking for. This is our Reticular Activating System (RAS) in action. You can use Google to find out more about the RAS and business. The RAS is constantly filtering zillions of bits of data about the world around us down to a handful we have told it, consciously or more likely unconsciously, are important to us.
This means your brain is filtering out everything that doesn't match the ideal customer profile you've been building up this whole time! You literally do not see anything else.
So OF COURSE you feel fear! You look around for better customers--but your RAS does what it's been trained to do, and filters out 100% of everything that doesn't fit your current client profile--and that pit of doom opens in your stomach because your handy dandy brain feeds you back a platter of Zero Results!
Once in awhile the blinders slip for a moment. You have a conversation with an expert and get a glimpse of something else. Another market. Somewhere else you could use your skills for better results. A book you read gives you an idea. You see another service provider doing what you do--but for a different group of people, and making a lot more money.
That's one way of stepping up.
Another way is to consciously engineer it.
I'll bet your current ideal customer profile was developed in a haphazard, reactive, "take it as it comes" kind of way. You probably fell into the comfort zone you're in, without a whole lot of thought about it. WHO would you work for...WHAT would you do...HOW would you provide value? These questions were answered unconsciously.
What if you went about it consciously?
At this point you've realized you are going to have to find a new kind of customer--and you have no idea where to look.
Your RAS has let you down (but it's not the RAS' fault...you programmed it!).
Don't stop here.
While this realization causes even more fear and panic, this is the signal you have arrived on the leading edge.
You are right on the forefront of development for your business.
Don't stop now.
Yes. You are going to have to find:
- new people to talk to--a new ideal client profile
- a new language to speak with them
- new problems and symptoms to understand.
This is all outside your current comfort zone, and that's why it feels so uncomfortable to contemplate. But it's exactly what you did in the first place as you grew your business.
There's nothing crazy or truly scary here--beyond the giving up of what you already have.
My Own Experience In Being Afraid To Raise Prices
Again from personal experience, what you have now is a pale shadow of what you deserve. If you have any true competency at all, business owners who are flush with money and used to handing over larger sums than you can contemplate at this time are desperate for your help. Just ONE of these customers will reward you more than TEN of your current crowd. Imagine what that would do for your business...your peace of mind...and your results.
I developed competency in a discount marketplace. I got good at playing that game. This was stupid! I was earning half of what I made at a corporate salary. That game topped out at a few thousand dollars a month for me, but I knew how to produce money from it and it worked for me. Even though after awhile I experienced all of those symptoms listed at the top of this post, I grimly held on. I could get that money. And I couldn't see other kinds of customers. Every time I tried to look around--every few months or so--I'd see a big open sea of nothing. Scary! Yes! Scary! And so I was angry, but I held on to what I had.
This was a huge mistake. I could be a year ahead of where I am now, if I had known and done what I know and do now in 2013. Instead, I spent that year shuffling back and forth between struggling in the discount marketplace and vainly looking for a better class of customer. I asked people for help. If there was any provided, my RAS filtered it out.
Finally, I made what felt like a brutal choice.
I stopped talking to my original marketplace.
I quit communicating with those people. I used my realizations about Pricing to come up with a four-figure minimum acceptable as a revenue target. And then I went looking full time for that new marketplace.
It was like grinding gears. I was tempted to run back to the old marketplace, because I understood it. Fear stalked me every step of the way for weeks.
But then the blinders started to slip. Since I was consciously trying to reprogram my RAS, it began feeding me new data. Things I hadn't seen before. Opportunities that had been out there the whole time...but because of my RAS and my limiting beliefs to that point, I had filtered out and literally not seen.
I got a few clients at my new number--and each one took the place of FIVE past customers.
Over the space of four months, I went from being reliant upon a desperate, low money marketplace to a much more relaxed, moderately cash rich client profile whose needs and situation I began to understand.
I learned that language.
I learned those problems and symptoms.
I learned what to look for to spot the profile of someone who was in this better position to make use of my services.
And it really didn't take very long.
Suddenly I was offered the chance--on the back of a smaller initial project--to run a launch. From that one client I made more than I would have from FIFTY customers in my original marketplace. And I got transformational results.
Since that time, I have raised my minimum price again and again. The second jump was not as dramatic as the first, but was prompted by this thought: "Hmm...this number doesn't excite me anymore. ...What number does excite me?" And the most recent increase, a doubling of the previous number well into the mid-four figures, is starting to feel like "Not enough" now.
And each time I have gone and found that new customer profile.
I'm about to go do it again. And this time, the market is completely different from any I've been working with in the past five years.
The good news: it's easier to do than your fear is telling you right now.
That first jump is the hardest.
After that, the process gets faster and easier...because you have a process! And most importantly, you believe you can accomplish it.
Your Plan To Overcome Being Afraid To Raise Prices
So here's the plan.
Note that you are in a comfort zone, likely unconsciously and haphazardly arrived at, concerning your current marketplace.
You have your RAS blinders on. You literally cannot see better opportunities yet. But you can consciously reprogram your brain to see them.
You must stop talking to your current market to make room--this is just like throwing the clothes out from your closet you never wear so there's room for new garments. You do not have to cut them off utterly like I did...a phased reduction would work. But you must deliberately pursue identifying this new ideal customer: a considerable percentage of your time must be invested in doing so.
Remember the payoff for learning this new marketplace and commanding these higher prices is a huge one.
Constantly keep in mind that it gets easier as you go. You cannot unlearn what you learn. Once you figure out what these new people look like, where they are at, and how you can work with them, you can never lose that knowledge.
The sense of power, relaxation and ability built through this process destroys timidity and makes you realize you are far more effective than you thought back in the old market.
The new projects will be a heck of a lot more exciting, I promise you.
Do you get the point here? BE DELIBERATE.
Once you begin down this path, the only direction is Up. Be brave for just a little while, and join me on it.
>> Jason Kanigan is a business development expert with two decades of experience helping leaders at organizations from startups through the Inc. Top 1000. If you want help with Pricing, book a call with Jason here. Was this information helpful? Please Like or Share so others can benefit from it! And if you have a question, kindly Comment below. <<