New Year. New prices for my old customers. Yes or No?!

8 years ago

Find a way to offer value to your customers that isn't price-based, and that differentiates your service from the competition.

Any business that's solely price led, risks getting caught up in a race to the bottom.

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TNT011

8 years ago

Originally Posted by Frank Donovan

Find a way to offer value to your customers that isn't price-based, and that differentiates your service from the competition.

Any business that's solely price led, risks getting caught up in a race to the bottom.

Frank,

It sounds so great and positive when you put it this way. Yet, sooner or later it all comes down to the price itself. On the other hand, I'm fully aware that this "race to the bottom" will have to end up somewhere. I will have to draw a line and say, look enough is enough, I need this price to guarantee a quality you used to get. I'm postponing that moment, and I know it, and I will regret it.

Thx,
T

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aizaku

8 years ago

this is so true..

and i was also guilty of trying to win the price wars (in my niche)

adding extra value to my pricey printables was a game changer.

-Ike Paz

Originally Posted by Frank Donovan

Find a way to offer value to your customers that isn't price-based, and that differentiates your service from the competition.

Any business that's solely price led, risks getting caught up in a race to the bottom.

Thanks
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TNT011

8 years ago

Originally Posted by aizaku

this is so true..

and i was also guilty of trying to win the price wars (in my niche)

adding extra value to my pricey printables was a game changer.

-Ike Paz

The "price wars." You are right when it comes to this. It's easy to be brave when you're doing just fine. But again, there's a line. There's a limit. Sooner or later, you have to say, either I will do it for this price, or I am not doing it at all.

Thx.
T

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aizaku

8 years ago

Originally Posted by TNT011

The "price wars." You are right when it comes to this. It's easy to be brave when you're doing just fine. But again, there's a line. There's a limit. Sooner or later, you have to say, either I will do it for this price, or I am not doing it at all.

Thx.
T

exactly, well put

-Ike Paz

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Oziboomer

8 years ago

Originally Posted by TNT011

The "price wars." You are right when it comes to this. It's easy to be brave when you're doing just fine. But again, there's a line. There's a limit. Sooner or later, you have to say, either I will do it for this price, or I am not doing it at all.

Thx.
T

I was watching and listening to a live webinar recently from a highly respected photographer and member of this forum.

He was talking about increasing revenue for photographers and in particular wedding photographers.

Here's the takeaway.

Once you have delivered an outcome for a client they now Know, Like and Trust you.

More so if you have captured a special moment in their lives.

TRUST is a very important part of doing business.

If your clients trust you and you give them a "reason why" - refer to Cialdini Influence

THEN you don't really have an issue raising prices.

Another thing is the erosion of profit that is likely to occur if you don't raise prices.

Most things, at least where I am, go up at least 5% per annum. . .

SURE the government says inflation is LOW. . .but. .

Has your cost of living gone down?

If so then don't raise your prices.

If not then GIVE a REASON and just do it.

Unless you are selling Fast Moving Consumer Goods there should be little resistance because your clients are doing the same.

Raise them at least as much as Inflation but why not more?

The other option you've already stated.

Best regards,

Ozi

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TNT011 8 years ago

Ozi,

I hear you. My trouble I go 5% down at the end of the year. What's even worse, my start price was a results of negotiation (bargaining) to be quite honest. I began with not too much room to maneuver. Costs are the lovely reminder at this time of the year how successfully unsuccessful I am.

And that "unique" experience, that's something worth considering. Yet, what kind of a unique service I can offer? Wedding photography really captures special moments in someone's life. What do we do? We do business. Take care of the payments. Checks. Nothing special and worth remembering. You do it and move on.

Need to check if there's some crash course for photography available, lol.

Appreciated,
T
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David Beroff

8 years ago

Originally Posted by TNT011

I'm selling my know-how my services not some building materials.

Have you improved your know-how by 10% in the last twelve months, so you can offer better service to your clients? Then raise your prices; don't lower them.

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TNT011

8 years ago

Originally Posted by David Beroff

Have you improved your know-how by 10% in the last twelve months, so you can offer better service to your clients? Then raise your prices; don't lower them.

Really nothing to add. Straight to the point. It's like that cartoon or a movie, can't remember, a good and a bad angel, not to say a devil, sitting on your shoulders and "advising." Increase/decrease, increase/decrease, it's driving me crazy. These comments are actually saying what I'm afraid to admit myself.

Thx,
T

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Sid Hale

8 years ago

I think your problem exists only in your own mind.

Originally Posted by TNT011

Christmas won't come early this year, at least not for me. Yet, I think, it's not too early to ask this question. What I'm to do with my old clients in the new year? The first logical thing to wish and do is to keep your existing clients. How? I used to reward their loyalty with a new better price, if we are to continue working together in the new year. Here's my problem now.

I have some clients from the year before. Got some new ones this year. Now, the old ones already got their discount when we welcomed 2016. The new ones still don't know about this practice of mine. My new customers certainly deserve a discount because I intent to keep them. But, what I'm to do with my old customers? They (maybe) already expect another discount.

You may say, I should've known better. But, you know what. I struggled really hard. First year nothing. Then I got some long term clients. I was happy. Desperate to succeed. Didn't have the courage, vision, or whatever, to plan long term. From January to December that was my current perspective. Of course, the clients loved new prices. Now I know they wouldn't leave me either way. But back then, my situation looked quite different.

I realized that the more and longer I work, the worst it's going to become for me. At one point, theoretically, I'm going to work for free. But, one the other side, I'm afraid that I will lose my customers. There will always be someone to offer better prices. So, here I'm stuck between the old and the new year, between my old and new customers and prices.

My brother-in-law is a sales manager something that has to do with the construction material. Every new year they increase their prices little by little. Yet, he and his company can justify this decision. Like the production and transportation costs are going through the roof. So, we don't have much of a choice than to increase blah blah. You know what I'm saying, don't you? But wait what's my excuse? I'm selling my know-how my services not some building materials. I'm going to say, what? I need to spend more. The prices of computers and Internet services increased. So, asked my brother-in-law, what's the catch?

We're selling, they're buying. We're increasing our prices, they're still buying. It's easy for him to say. The clock is ticking and I don't know what to do. Either I will lose money or my motivation to work. It seems I have to embrace a lose-lose scenario, unless I don't come up with some kind of an acceptable solution for both myself and my customers. Any advice I can actually apply for my situation is strongly appreciated.

You've decided that you need to give a discount simply because you gave one last year.

You don't!!!!

The customers that you gave a discount to last year, don't necessarily expect another, and your new customers have no idea that you have done this in the past.

Assuming you are providing good service for the money spent, and that you are competitive in your market, there is no reason to suppose that your customers are even looking for a new solution. You might lose one or two, but it's more likely to be because of some change in their own situation than because of your pricing.

If you really feel a need to offer some sort of "gift" in exchange for their loyalty, try sending them a well thought out email thanking them for that loyalty and announcing that in spite of your own increased business costs.. you are NOT going to increase their costs for next year.

This should not be a quick and dirty.
Put some thought into it, disclose something about your increases in business costs (higher advertising costs, increased costs for your employee benefits, OBAMACARE

, etc.). Give them numbers (i.e. percentage increases). Don't go overboard painting a bleak picture (it has to be believable), but make sure that they appreciate that it does cost money to provide your service.

Again, add at the end of the email that you are holding their costs for your services at the same level, as an indication of your appreciation for their business. Close with a "Thank You" for their loyalty, and best wishes for the new year.

Just before you send the email, increase the price on your sales page.

The idea is to make the customer feel as though he is being treated special as a reward for his/her loyalty.

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TNT011

8 years ago

Originally Posted by Sid Hale

I think your problem exists only in your own mind.

...

Assuming you are providing good service for the money spent, and that you are competitive in your market, there is no reason to suppose that your customers are even looking for a new solution. You might lose one or two, but it's more likely to be because of some change in their own situation than because of your pricing.

If you really feel a need to offer some sort of "gift" in exchange for their loyalty, try sending them a well thought out email thanking them for that loyalty and announcing that in spite of your own increased business costs.. you are NOT going to increase their costs for next year.

You made me think. These panic attacks of mine, do something you may lose your clients, should be dealt with accordingly. I think I should walk in my client's shoes more often. I use other people/company services. I don't want to change them, unless I have to. As long as I get what I want, I'm not thinking about alternatives. If they award my loyalty, OK. If not, OK again. This was a wakeup call I needed.

Appreciated.
T

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ChrisBa

8 years ago

I personally don't like this type of discount, or at least offering it.

I personally think it devalues your product and also can lead to bad expectations and if the word gets out, and also lead to driving bad behaviour.

IMO, stop doing this and if any old customers ask, just say it was a 1 time thing. (just my opinion)

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TNT011 8 years ago

The road to hell is paved with good intentions. Mine will be paved with endless discounts, lol.

Instead of "there's always more" in terms of better prices, should be "there's always more" in terms of quality, associated with my services.

I never thought this could be a potentially dangerous thing for my business. I got a warning right no time.

Thx.
T
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igrowyourbiz

8 years ago

Since 1994 I have increased my prices (dramatically) every single year.

Not just for general purposes but for many reasons.

1) My notoriety increases every year, therefore my demand increases every year
2) I am constantly developing myself personally, I am a better person in general each year
3) I increase my skills each year
4) I increase my education each year
5) I increase specific experience levels each year
6) I provide a greater/expanded scope of existing service each year
7) I provide new offerings each year

My efficacy increases each year therefore my VALUE increases each year. Sometimes that means dropping old customers that do not appreciate this. That is fine because the new customers are more appreciative of whatever new level of value I offer.

My price goes up because the value goes up.

I didn't mention the fact that the cost of doing business goes up. The price of domains, hosting, automation, paper, gasoline, office rent, insurance, payroll, food, etc ALL GO UP every year. It COSTS more to do business this year than it did last year. You customers face a price increase EVERYWHERE else... I feel this is the least valid reason to increase your pricing, but still a justifiable one. However, if this is all you got, you shouldn't be in business IMO.

Never lower prices, increase value.

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TNT011

8 years ago

Originally Posted by igrowyourbiz

Since 1994 I have increased my prices (dramatically) every single year.

Not just for general purposes but for many reasons.

1) My notoriety increases every year, therefore my demand increases every year
2) I am constantly developing myself personally, I am a better person in general each year
3) I increase my skills each year
4) I increase my education each year
5) I increase specific experience levels each year
6) I provide a greater/expanded scope of existing service each year
7) I provide new offerings each year

My efficacy increases each year therefore my VALUE increases each year. Sometimes that means dropping old customers that do not appreciate this. That is fine because the new customers are more appreciative of whatever new level of value I offer.

My price goes up because the value goes up.

I didn't mention the fact that the cost of doing business goes up. The price of domains, hosting, automation, paper, gasoline, office rent, insurance, payroll, food, etc ALL GO UP every year. It COSTS more to do business this year than it did last year. You customers face a price increase EVERYWHERE else... I feel this is the least valid reason to increase your pricing, but still a justifiable one. However, if this is all you got, you shouldn't be in business IMO.

Never lower prices, increase value.

This is my anthem, I mean it, lol.

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DABK

7 years ago

I agree with you but have to chastise you on the use of notoriety. If notoriety goes up, prices go down. If fame goes up, prices go up (or can).

I picked on you because you're the 3rd one in the last 4 threads to use notoriety as positive fame when it's the opposite. Yes, misusing notoriety is one of my pet peeves.

But, like I say, I like everything else you wrote.

The OP can repackage what he offers, for more money. Give old users options:
stay with what you have at the same price
get this new package (helps you in this additional ways) for this (higher) price.

Unlike the OP, I think people expect prices to go up and they do not expect discounts, unless you promise them discounts... Giving them one discount does not mean you're promising them other discounts.

There's something the OP is not even thinking of. There are people who would buy his stuff if it were priced higher, with, possibly nothing changed, or just the packaging/bundling.

General Mills used to make cheerios, the same cheerios, that they sold in a white and green, ugly looking box for $0.80 and one nice box, with lots of colors and some character(s) on the box, that they sold for $1.39. I bought the cheap one. My brother bought the expensive one.

I bought the cheap one because, having determined they're the same and there was no taste difference, I was not going to pay for packaging.

My brother bought the expensive one because the added cost, translated to him, into extra quality. He swore the expensive one tasted better. (Like I said, they were the same, as per General Mills and my taste buds.)

There are people who buy SEO and marketing like me and people who buy them like my brother. Who do you want to sell to? I hate selling to me, love selling to my brother.

Originally Posted by igrowyourbiz

Since 1994 I have increased my prices (dramatically) every single year.

Not just for general purposes but for many reasons.

1) My notoriety increases every year, therefore my demand increases every year
2) I am constantly developing myself personally, I am a better person in general each year
3) I increase my skills each year
4) I increase my education each year
5) I increase specific experience levels each year
6) I provide a greater/expanded scope of existing service each year
7) I provide new offerings each year

My efficacy increases each year therefore my VALUE increases each year. Sometimes that means dropping old customers that do not appreciate this. That is fine because the new customers are more appreciative of whatever new level of value I offer.

My price goes up because the value goes up.

I didn't mention the fact that the cost of doing business goes up. The price of domains, hosting, automation, paper, gasoline, office rent, insurance, payroll, food, etc ALL GO UP every year. It COSTS more to do business this year than it did last year. You customers face a price increase EVERYWHERE else... I feel this is the least valid reason to increase your pricing, but still a justifiable one. However, if this is all you got, you shouldn't be in business IMO.

Never lower prices, increase value.

Thanks

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Punit Rao

8 years ago

First thing that I want to tell you is that you should value your customer but you have to also keep in mind that it should not make loss for you.Value your old customer but try to catch eye of new customers by using some discount and all .

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TNT011

8 years ago

Originally Posted by Punit Rao

First thing that I want to tell you is that you should value your customer but you have to also keep in mind that it should not make loss for you.Value your old customer but try to catch eye of new customers by using some discount and all .

That's the trouble, you're always on the run. Take care of your customers, but find the new ones, as well. It's exhausting and frustrating. What if I lose my most important customers. What if I lose all of my customers. It seems like I'm paying the price for the "peace." Little by little, so I can run the smooth business. Yet, there are limits. Now, I know that.

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gingerninjas

8 years ago

Personally my rate has been low compared to my other colleagues over the past few years as I build up my clientele and prove my worth.. I have made two small hourly rate increases however I have done these not in the new calendar year but in the new financial year (which is 1st July in Oz).

This has been made across the board for all clients and I have given two months notice in all quotes and invoices so this is clearly outlined so there is a paper trail should there be any questions about the increase.

From this new rate, I can discount it for client's who are regulars however I always clearly outline when a discount is being made so they understand they are getting a deal.

I never apologise for the increase, if anyone ever questions my rate they probably aren't really the clients I want anyway.

I have rates for affiliates such as graphic designers and individuals who source work for me and I pass on a discount so they can oncharge their client's at a higher rate and make a small profit from recommending me.

I would focus on what you are delivering service-wise rather than the price her hour or per project, now I am basically at full capacity so I never really worry about the hourly rate, as I am very confident I am offering a value for money service to my clients.

As a starting point, I would do a competitor analysis of your local competition and even do some cold calling to suss out what they are charging to ensure you are in the same ball park as well.

I am raising my prices again in the next six months as well as a range of set prices for our deliverables as we have brought on some new staff who are adding an extra dimension and additional support for our clients, the client's are happy as they get more value for money and I am happy as I can cover the increasing costs of business.

Good luck

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TNT011

8 years ago

That is my main trouble I guess. I am so eager to find long term clients. Yet, when you have a fresh start, you don't apologize. You have your prices and that's it . But, I can't go running around for new clients all the time. I have to build something long term too. Had this situation, an "ancient" client knocked on my door. I was like, I can work for this money. I have improved and I am fully independent now. Just like in some Virtual Reality, with a new client you can be whoever you wanna be, and set the price you like. Your I don't apologize for my prices approach is something that I will remember and apply. Thx.

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gingerninjas

7 years ago

Originally Posted by TNT011

That is my main trouble I guess. I am so eager to find long term clients. Yet, when you have a fresh start, you don't apologize. You have your prices and that's it . But, I can't go running around for new clients all the time. I have to build something long term too. Had this situation, an "ancient" client knocked on my door. I was like, I can work for this money. I have improved and I am fully independent now. Just like in some Virtual Reality, with a new client you can be whoever you wanna be, and set the price you like. Your I don't apologize for my prices approach is something that I will remember and apply. Thx.

Quite a bit of my work is through referral through other client's so I usually fix my rate (and ensure it is fair) as people can easily find out what it is and I prefer there isn't any discrepancy. If I want to give a discount I will, however I work off one set hourly rate to make things easier (and so I remember what i quote). I think when you have a few regular clients you can be flexible and the work will come easily via referral. I would focus on your offering more than your rate, and then fine tune it as time goes on.

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yukon

Banned 7 years ago

Raise the prices and you'll get rid of the low ballers.

Problem solved.

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TNT011

7 years ago

Originally Posted by yukon

Raise the prices and you'll get rid of the low ballers.

Problem solved.

The moment of truth, I guess.

If my client list is full of low ballers, then the problem is in me. I need to change the way I run my business, not just the prices.

Thx,
T

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yukon

Banned 7 years ago

Originally Posted by TNT011

I realized that the more and longer I work, the worst it's going to become for me. At one point, theoretically, I'm going to work for free.

Originally Posted by TNT011

The moment of truth, I guess.

If my client list is full of low ballers, then the problem is in me. I need to change the way I run my business, not just the prices.

Thx,
T

If you're working for free it's a hobby, not a business.

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Oziboomer

7 years ago

Originally Posted by TNT011

The moment of truth, I guess.

If my client list is full of low ballers, then the problem is in me. I need to change the way I run my business, not just the prices.

Thx,
T

The scary thing is when you raise your prices and the low-ballers stick.

Don't worry too much because you need to make the price rise painful enough to lose the "D" clients yet make it worthwhile enough to service the "Cs"

The "As" and "Bs" won't worry too much about the price.

I always remember this. . . not sure where I heard it. . .

"There is always someone whether stupider or smarter than you who can charge less"

Unless you are smarter and can make a profit from charging less why are you charging less?

Just charge more.

It gets easier doing it that way.

Best regards,

Ozi

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TNT011

7 years ago

Originally Posted by Oziboomer

The scary thing is when you raise your prices and the low-ballers stick.

Don't worry too much because you need to make the price rise painful enough to lose the "D" clients yet make it worthwhile enough to service the "Cs"

The "As" and "Bs" won't worry too much about the price.

I always remember this. . . not sure where I heard it. . .

"There is always someone whether stupider or smarter than you who can charge less"

Unless you are smarter and can make a profit from charging less why are you charging less?

Just charge more.

It gets easier doing it that way.

Best regards,

Ozi

Definitely worth remembering. Yet, this is something I would like to do when I reach the point where I have more clients than I can handle at the moment. Then, I could do some "filtration" like if you wanna stay around then you have to pay. Otherwise, I can afford to lose you. Honestly, I'm still in my shaky situation with my independent business. Admitting that I'm too scared to play a tough guy regarding my price policy.

Appreciated,
T

Thanks

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JohnVianny

7 years ago

Dont whitnk about the price: think about the CONTENT.

Price never is the real problem. People waste a lot of money buying unuseful stuff....so WHY won't they buy YOUR GOODS if they are GOOD?

Re-immagine your marketing strategy and build up some new value.

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TNT011

7 years ago

Originally Posted by Connann

Dont whitnk about the price: think about the CONTENT.

Price never is the real problem. People waste a lot of money buying unuseful stuff....so WHY won't they buy YOUR GOODS if they are GOOD?

Re-immagine your marketing strategy and build up some new value.

It's just like in that movie, or it was a cartoon. Think positive, think positive, lol. Have like two months to figure it out. One thing is for sure. Will go through all of these comments before I reach my final decision.

Thanks

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Steve B

7 years ago

Originally Posted by TNT011

It seems I have to embrace a lose-lose scenario, unless I don't come up with some kind of an acceptable solution for both myself and my customers.

Do your customers really love and embrace what you do for them for the price they pay you? Do you offer products or service they can't get elsewhere?

If so, you have nothing to worry about.

As others have said, find some alternate value that you can "gift" them that will be both meaningful and "new" to them.

Here's just one suggestion: give them some of your personal one-on-one time and expertise. Set up a personal office call (or Skype) for an hour to talk about their business and how you can give them some "free" personal help within your expertise. Doing this for a client when he is not expecting it can pay dividends for both of you. It makes the client feel special and it builds your trust and credibility. If you can help someone in a meaningful way (I can't tell you what that is because I don't know the business you're in) you will endear yourself to them and they will see that you have a genuine interest in their success.

How many offers of personal one-on-one time have you ever been invited to by a service provider? Listen to their wants, needs, desires and address those concerns (whether on-the-spot or later as you think about how best to help them).

I'm sure there are other ways to give value as well.

Steve

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TNT011 7 years ago

I'm deeply intrigued by this Skype personal touch suggest. Will definitely give it a try.

Appreciated,
T
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New Year. New prices for my old customers. Yes or No?!

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