7 Ways to Raise Rates Without Losing Clientsby
The 2020 tax filing season officially begins today, which means many accountants and bookkeepers are busier than ever. If you've been considering raising your rates this year, Loren Fogelman encourages you to do so, and offers 7 tips to help you get what you deserve for your hard work and keep your clients.
It’s doesn’t matter if you’re a solo enrolled agent or a corporate accounting firm, every business struggles with the “raise your rates” question. Of course, you want to earn more.
Then why is it so difficult? Because charging more feels risky.
My clients share similar concerns.
- Nobody will pay those fees.
- I can’t charge more than my competitors.
- What if clients leave?
- I want to charge fair prices.
- What if I can’t meet their expectations?
As a result, you postpone increasing your fees. Sometimes weeks, months or even years pass before you actually follow through.
Common Mistakes which Derail the Conversation
Eventually, you decide it’s time.
Now you have to share the new rates with your current clients. So, how do you plan to communicate with them?
Before we focus on what to do, let’s start with 6 mistakes to avoid when telling your clients about your new rates.
- Defensive. People don’t like change. Especially, when it comes to money. Some clients will pushback about your new rates. A that point, don’t cave into the pressure. When your defensive emotions hijack the conversation, you lose ground. Then the conversation becomes destructive instead of beneficial.
- Expectations. Avoid being surprised when your price sensitive clients complain and share their frustrations with you. It’s going to happen. You may already know who’s going to complain, since they have been doing that all along.
- Apologetic. You don’t need to apologize. And, don’t waiver about your decision. This is the moment of truth about who’s running your business.
- Your costs. Sharing about your increased bills or the economy doesn’t matter to your clients. Instead, they’re thinking about how the rate increase impacts them. They’re concerned more about their cash flow than your profit margin.
- Attrition. Once you raise your rates, expect about 10 percent of your clients to leave you. Don’t let this catch you off guard. Often, the most difficult and the price-sensitive clients are the first to move on.
- This is a good thing. It is time to start replacing these lost clients with high value clients who appreciate and respect you. Even if you lose some clients, you end up more profitable.
Even some of your best clients may question your rate increase. How you respond may determine whether they stay with you or move on.
How to Share Your New Rates with Current Clients
Follow these 7 steps to confidently raise your rates without losing clients:
- Lead with benefits. Focus on your client, rather than you. What benefits do your clients receive from your services? Clients need to believe what they have to gain is greater than your fees.
- The client experience. No one wants to do business with a company that treats you poorly. High value clients invest in a certain type of experience. This includes access, response, training, new services and relationship. Research by American Express reveals that 86 percent of clients are willing to pay more for a better experience.
- Bonuses. Bonuses show appreciation. Consider all the loyalty cards in your wallet. Adding in something of value strengthens your offer. What’s something extra you can include which doesn’t impact your bottom line, but your clients highly value?
- Confidence. Compile a list of benefits your clients receive from your services. That’s because it’s important for you to firmly own the value you offer. Clients are highly perceptive. They’ll question your new rates, especially if you have any doubts.
- Commit. Commit to your decision to raise your fees. Don’t waiver or negotiate. When questions arise, remain polite and don’t take it personally. Instead, continue the conversation to understand their core concerns. As a professional, you want to focus on what’s in their best interest instead of what’s in your best interest.
- Objections. Don’t let objections throw you off or create doubt. As with anything, practice and preparation improves your results. Set time aside to list the top 5 objections. Next, script a response. Then practice responding with your soundbites. You’ll notice that objections no longer derail the conversation.
- Positive expectations. If you’ve been overthinking, and delaying, a price increase, then it’s time to finally raise your rates. Your clients may not be happy at first, since they were getting a great deal. The majority will remain with you and accept the price increase.
Smoothly Transition to Your New Rates
How long have you been thinking about this? The decision to finally do something offers relief. It’s evidence that you finally decided to take charge.
As you discuss your new rates with your clients, remember to emphasize areas which are of high value to your clients. During the conversation, emphasize the benefits they enjoy. Then, patiently answer all their questions. Claim your FREE Resource now to smoothly transition your clients to your new rates.