It can be easy to get caught up in throwing money at this or that…
How do you know it’s time to raise your rates? How much do you raise them by? How much notice do you give? And do you raise the price for existing clients or just new clients?
One of the biggest questions I hear when it comes to raising prices is simply “should I?” And really I can’t say automatically yes, everyone should raise their prices. There’s a lot that goes into pricing, and while you may want to raise prices just because you want to, there are several considerations to make. If you haven’t yet watched the video I did earlier this year about the 6 THINGS TO CONSIDER WHEN DETERMINING PRICING, be sure and check that out. And while it applies to how you initially set your prices, the same concepts apply to raising your prices as well, so be sure and watch that!
For now, here’s the biggest sign that it’s time to raise your prices…you’re booking out pretty far, especially in relation to what other therapists in your area are booking out. If it’s just 2 weeks at a time, don’t jump the gun. But if you’re booked out solid for 6 weeks or more consistently, that’s a pretty darn good indication that it’s time to increase your prices. Again, check out that video for those other things to consider; I don’t want to waste your time today repeating the info if you’ve already seen it.
Next, who do you raise rates for? So you kind of have 2 options here…you can raise your prices across the board, so everyone, existing clients and new clients all pay the same rate. OR you can grandfather in your existing clients so they stay at their old price, and only new clients pay your new increased rate. Personally, I prefer the second method here. It’s what I did in my own practice and it worked great for me. I know it’s not for everyone, but there are a few extra benefits to it that I think make sense for a lot of therapists. Like I said, there’s nothing wrong with raising your prices across the board so new and existing clients pay the same rate. People do it all the time and it works great. But I decided to go with grandfathering in my existing clients for a couple different reasons; first being that it was kind of a way to show my appreciation for their loyalty. Some of those clients had been with me consistently for several years and I wanted them to know how much I appreciated them.
Secondly, I knew I would lose some of my favorite clients because they were on a very fixed income and simply could not afford the increase. And lastly, I decided that in order to maintain their old rate, existing clients would have to keep a regular schedule with me, coming in at least once a month. If not, they would pay the new increased rate. That built in even more loyalty and incentive to keep regular appointments. So for me, it just worked best. And it might for you too, but obviously, you need to do what feels right to you and fits your business. Whichever way you go, don’t let it stress you out. Raising prices is just part of business, whether that’s products or services, it happens all the time. Another question often posed on the subject is how much you should raise your prices by.
Again, just like with most things I tell you, there’s no broad answer to this, because there’s a lot that is really specific to your individual circumstances. But, it really depends on who exactly you’re raising prices for. If you decide to raise prices on all new and existing clients, smaller jumps are usually best. So maybe go up by $5 or $10 at a time. If you’re only raising prices on new clients, you can make larger jumps.
For me, I jumped up $25 at a time because I didn’t have to worry about surprising my existing clients. In fact, it’s also a nice incentive for people to go ahead and start booking regular appointment with you if you give a public heads-up that you’ll be raising your new client rate soon and if they book out a regular spot before then, they’ll get in at the old rate and keep it as long as they keep those regular appointments. Make sense? You have to do what’s right for your business, and I think if you take into considerations those 6 things I talked about in the other video I mentioned earlier, along with all of this today, I think you can come to the right conclusion of what fits best for you and your clients.
And last but most definitely not least, how much notice should you give of this price increase? Again, this depends on who exactly you’re raising your prices for…so if you decide to raise your rates for all new and existing clients, you’ll want to give a bit more notice; maybe a month or so. But the larger the jump, the more notice you’ll want to give. If you’re raising rates just for new clients though, you can do a pretty short notice. I think I only gave about a 2 week notice via email and social media that I would be going up $25 for new clients. Again, you may add in that incentive of getting on the books before then to lock in the old price, if you want, or just raise your rates and be done with it. Whatever feels right to you.
So, are you considering raising your prices? How much are you going up and how are you going to go about the whole thing?