What should I consider when raising my fees?
The client’s perception of value determines whether the price we charge is reasonable for the service provided. Demonstrating value lets you make a convincing case about raising your fees.
Value may mean doing more things that cost less than the increase. If you handle estate planning, for example, you could add financial planning as a service, either as part of the fee package or for a designated added fee. Sometimes, showing that you provide better-than-excellent service is all you need to justify a fee increase – for example, calls consistently returned within two hours, or final client documents nicely packaged in an attractive folder. Other times it means achieving a better than expected result, placing the client on the peak of the "satisfaction curve" for accepting an increase.
If you’ve done these things, ask a few questions. Is your new fee reasonable and in proportion to the value of the services you perform? Will the client understand the amount and nature of the fee and consent to it? Is your new fee competitive with others in your geographic and practice areas? If all the answers are yes, raise your fees. We’re discussing value here, not per hour pricing. No matter what your modality of pricing, the client must perceive he/she is receiving value for the amount to be paid.
Those clients who recognize your value will accept the higher fees and remain with you. Those that leave will provide you with more time to market to better clients who appreciate the value you will provide.Tags: Cash Flow - Finances, Management, Marketing