Here are 5 ways you can raise your prices and get paid MORE for the services you are already performing.
#1: Just raise ‘em. Pretty ingenious, huh? That’s why I get paid the big bucks. Just type up a simple letter explaining that on X date, your rates are going up. You don’t need to apologize or get a note from your mother. Just do it. The world will not come to an end and your clients will not gnash their teeth, scream, and cut themselves with rocks. In most cases, you will only get a mild response.
#2: Price increase alert with up-sell. In a letter or e-mail, you alert your clients that your rates are going up, but that they can save some money or lock in the current on-site rates if they sign up on a managed service agreement. Keep in mind there are several ways to announce a price increase while up-selling clients on to another service; this is only one example. You could also announce a price increase for on-site rates, but thanks to this new remote monitoring and support software, you can fix most problems remotely for the same rate they are used to paying. This would enable you to charge the same rate for remote repairs that you are charging for on-site services now, while increasing your on-site rates a few points.
Instead of locking in their current on-site rates as the letter suggests, you could also offer to waive the setup fee for the managed services (yes, you have to have a setup fee in order to waive it. Creating a setup fee is a smart sales tactic that you should implement regardless of whether or not you increase your rates. It gives you bargaining power when selling managed services because you can “waive” it if they make a decision within a certain time frame).
#3: Create a new product or service category and charge more for it. At my constant nagging, Master Mind Member Luke Walling of Walling Data Systems recently implemented an emergency “while you wait” service that is about 30% more than his standard rate. He didn’t think anyone would buy it. He’s since discovered that not only are people buying it, but the people that do are far more grateful for the service!
You could “create” a VIP Client rate that guarantees a priority response. The travel industry has been doing this for years with first-class upgrades and VIP rooms with a view. When you think about it, most upgrades do not give you all that much, yet people gladly pay 20% – 50% MORE for it.
Take first-class seating on an airline. You get a bit more space, a snack worth $5, and the opportunity to board first. I guess you also get the ego trip of smirking at everyone else as they parade past you in first-class to get to the cattle car in the back; a benefit NOT to be undermined because people will pay a LOT of money to feed their ego and appear to be wealthy and successful.
#4. Reduce the current services you are providing. This is NOT my preferred way of getting more money for your services, but it is one way of going about it. For example, you could alert your clients that free phone support is no longer offered UNLESS you are on a support agreement. Newer clients will be less affected by this than old clients that already have expectations set.
#5: Tier your consultant’s fees and charge more for a client to see YOU instead of one of your techs. Attorneys have been successfully doing this for years, and it is certainly not a new concept. You’ll pay MORE to have the senior partners in the firm work on your case over the junior attorneys or paralegals. If you don’t have any technicians working for you, tier the cost of your services depending on the expertise needed. General network support gets billed at $125 per hour while custom development work gets billed at $150 per hour.
A quick note on introducing a new technician to a client that is used to seeing you: After speaking with many consultants about this, they all say that there is a certain level of “push back” from their clients when they first bring on a new technician and introduce them to their client base.
This, of course, is understandable since the client knows and trusts you. Inevitably they will complain that they want YOU to continue to be their technician.
However, if you explain that you will cost $50 an hour more AND provide the client with a guarantee or assurance that they will be just as satisfied with your new guy as they were with you, AND that you will oversee the work the new guy is doing, things will usually quiet down within a few months.