Real Business Questions: When Is It Time To Raise Your Prices?

This week on my Facebook Live “Ask Me Anything,” we jammed out on one of my favorite topics for service-based businesses: pricing.

It all started with Melista, a wedding photographer, currently receiving inquiries a year or two in advance.

She knows that it would not be wise to keep her current prices the same, because with her experience Melista will be worth more in 2020 and 2021. But, she asked: How do I know when it is time to raise my prices?

I said, “I gotchu boo,” and then I told her a story.

When I first started out as a wedding photographer, my prices were low because I needed to get weddings under my belt and establish my authority.

As I gained more experience and decided it was time to start raising my prices, I realized that all of the photographers in my area were making huge, yearly price jumps. They would go from charging $1,000 to $2,000 in just one year, and this ran the risk of being a terrible mistake.

>>Service-based businesses are highly reliant on referrals. If you have a massive price jump, you lose the referrals from your lower-paying clients.<<

This is why many photographers will raise their prices and regret it the next wedding season: they went from being a bargain-barrel service to a premium service…and their clients didn’t have a chance to catch up!

I realized the only way to grow my business, add more value for my clients, and be more profitable was if I didn’t make big sweeping changes in my pricing structure at one given time.

So what did I do?

Every 3 weddings I booked, I raised my prices $300. It was not a large jump, but it made a world of a difference!

After booking just 9 weddings, I was charging almost $1,000 more than when I started. By the end of my second year, my pricing went from a $2,000 package to $5,000—yet, I did not lose my referrals or break my client’s trust.

People will pay a premium price for a service-based business if they know you’re the perfect person for them.

Friend, It is time to raise your prices incrementally NOW—not a massive jump at the end of the season.

I hope this helped you! If you have questions of your own, I’d love for you to join my weekly Facebook Live chats. I’ll see you there!