Question: What's one piece of advice you would give a fellow entrepreneur who wants to raise prices significantly this year?
"We raised our prices for services four times in 2013, and by the end of the year, we were charging nearly 100 percent more for our work. We were also delivering more value. Each time we raised prices, we were attracting clients who saw the value. If you're delivering awesomeness, charging more should give you the ability to deliver greater value as well as add to your profits."
Create a New Product Niche
"It can be difficult to raise prices across the board without resistance, but sometimes a better solution is to develop a new "high-value" product for a specific type of customer. For example, you might be able to offer a new solution at 10 times the price point that is a great fit for specific customers and dramatically increases your revenue numbers."
Do It Gradually
"Consumer behavior research has shown that large, sudden jumps in prices is a recipe for losing customers. To get around this, increase the price in stages to avoid overwhelming the customer. So, if you are trying to raise the price from $50 to $80 for the year, try setting the price to $65 for six months. Then, raise it to $80. "
Do Market Research
"Go for it. However, to avoid offending existing clients, don't increase the prices for them without clearly explaining why you had to make this decision. It could be wiser to increase the prices significantly for new and prospective clients. Make sure you do your market research to ensure that they'll still choose your company over your competitors."
Double Your Prices, and See What Happens
"I worked with an apparel company that was previously selling its t-shirts at Old Navy prices. The boutiques and retailers wouldn't carry the t-shirts because of the cheap price tag, so the company almost doubled its prices. The boutiques and retailers started carrying them, and it gave the company flexibility to liberally use online discounts with consumers. Double up, and see what happens."
"Pitch your higher prices to customers who aren’t familiar with your current pricing before you look into raising prices with current customers."
Offer Aggregated Value
"Offer aggregated value. We once raised prices, but we offered additional perks, such as unlimited calls, dedicated phone line, etc. Even though we increased our prices a little, we were also offering other benefits."