It can be easy to get caught up in throwing money at this or that…
I wanted to talk to you today about the idea of honoring your price on existing clients indefinitely. That means raising your prices ONLY for new clients and why this is the approach I took in my practice, and you might want to consider for yours.
When it comes to raising prices, a lot of therapists get a little nervous. You know, what if I lose clients? What if my favorites can’t afford it anymore? And you’ve got all kinds of coaches and instructors screaming “You’re totally worth it!” and “Just do it. You got this!” and stuff like “If they value you and your work they’ll pay anything”. Well that’s not the real world for a lot of people. A lot of clients really can’t afford a big increase and are strapped to pay your prices now. And a lot of therapists just can’t bring themselves to raise their prices because it makes them feel bad. Now look, I’m all about charging based on the value you bring – if you provide something unique and special and highly effective, that means your massage is worth more and yeah, you should raise your prices. Go for it. And if you want to raise prices across the board on everyone, no problem. Do it. But it’s not like that’s it. It’s not like you only have two options…charge what you are now, forever, or raise your prices on everyone and potentially lose some clients or price yourself out of the market. There IS a third option…only raise your price for new clients and honor the fee your existing clients have been paying.
So here’s how it usually goes for a lot of therapists – not everyone, but a lot – they start out charging $50 or $60 an hour, then about a year or two in realize they need or just want to make a bit more, they’re bringing a little more experience to the table, learned a lot, things like that. So they increase their prices by $5 or $10. A few clients drop off because they can save a little somewhere else, or they’re just put off by a price increase, but most stay. Then in another year or two you go through the same thing. You’re sending out announcements again and a few more people drop off because “didn’t they just do this?” And yeah, you can replace clients, and it’s not like you’re not worth a price increase and need to charge more after a time. But what if you did a larger price increase just once every few years or so depending on your bookings, and that price increase only applies to new clients. So here’s what I did in my practice so this makes a little more sense.
I started at $50 an hour. That’s pretty standard in my area, most everyone charges around $50 or $60 an hour – I don’t really think anyone was over $60 at that point. After a bit, I was booking up a few weeks in advance and wanted to increase, so I jumped to $75 an hour. Yep, a $25 an hour increase. So I changed it on my website, on all my printed materials, and all that stuff. But I let my existing clients know, that as long as they stayed consistent with their appointments – my rule was coming in at least once every 3 months – then they kept that $50 rate, no matter what my prices went up to. Within less than a year, I did another jump to $100 an hour. And new clients booked it, and they were willing to wait a year for an appointment at that rate, because that’s what I was booking out with regulars who wanted to be sure they kept that $50 or $75 rate, but when they came, they would undoubtedly fill a regular spot that had opened up from someone moving, a schedule change, or just dropping off after a while. By the time I closed my practice to transition to this business full time, it was pretty split. It was about 40% that were still at my original $50 rate, about 35% that were at the $75 rate, and then the remaining 25% were at my $100 an hour rate.
Now, I don’t discuss how much I make or made specifically in actual income, but let’s say you have these same numbers. Let’s say you see 5 clients a day, 4 days a week, and take 2 weeks off in the year. That’s 1,000 clients per year. Let’s say you start at $50 an hour, so 1,000 clients at $50 an hour, you’d make $50,000 a year in revenue. If you did a small increase of $10 so you were charging $60 an hour, that comes out to $60,000 a year in revenue. At the proportions I had with different pricing, that would come out to about $71,250. So just some food for thought when it comes to working the numbers there. Again, there’s a lot of considerations to make, but just consider this.
So, was it a little more work to track who paid what price – yeah, I had to write it on their intake form so I would see it every time they came in to be sure – but it was not a big deal. It honored their loyalty to my business, it enticed them to stick around AND to come regularly – and then for new clients, I would always tell them I never raised rates on my regulars, so they could lock in whatever rate I had at the time when they started coming regularly – that enticed them to start right then and come regularly. And to be honest, keeping my prices higher than others in my area also built in a sense of “what’s so special about her?” so they were more likely to try me out.
And then there’s the benefit to me, the one who worried about raising rates and losing clients, or honestly, just pissing off people who had been loyal to me, who I loved working with. I’m a people pleaser by nature, and even though there are many aspects of that I have to keep in check to still run a profitable and efficient business, for me this was a happy medium, a happy compromise to meeting my business goals and still not feeling so icky about it as a person.
Now, does this type of thing fit everyone? No. There are plenty of you who do great just raising prices across the board. And for many, that’s just an easier way to do it and what fits you better. This is just a different option. So think about it and see if this would work well for you.