Raising Your Prices: Why, When, How

We’ve been talking a lot recently about pricing and why photography is so expensive. The principles that we laid out in this post and this IGTV are focused on photography but can be applied to any service based business, and we really hope that talking about pricing and money will help alleviate some of the awkwardness and discomfort that come along with these topics. Even though I’ve now sent out countless proposals, I always have a little pit in my stomach every time I press send. It can be hard for me to stand behind our prices, and the imposter syndrome that I feel on a regular basis can sometimes make me doubt that our services are worth what we charge - even though I know that we should probably charge even more.

It hasn’t been too difficult for us to raise our prices as we have acquired new clients, but the challenge for us has been how to raise prices with current clients. We recently just did this for the first time since we started our business two years ago. When you think about it, it makes sense that you would raise your prices every 6-12 months, just like the way that employees get raises. The scary part is that there is always a potential to lose clients in the process, but in reality this just creates more space in your schedule for clients who will pay what your services are worth. In this post I want to talk about how to know when it’s time to raise your prices, how to raise prices without losing your current clients, and how to let your clients know that your prices will be changing.

When is it time to raise prices?

Raising your prices is something that is easy to put off until you can’t anymore. Usually by that point, you’re already burnt out, so this is something you want to think about often as you continue to book new clients. Here are a few signs that it’s time to raise your rates.

You have more work than you can take on.
As your audience grows and you receive more referrals, your client roster will start to grow. Even if you work overtime, there will come a point where you simply cannot take on more work. It’s hard to serve your clients well when you’re overworked and don’t have any work/life balance, and in addition to burning you out, the quality of your work will probably suffer as well. When you raise your prices in order to keep your workload at a reasonable level, you’re actually serving your clients the best you can because you’re making sure that you will have time to really focus on them and give them the best service.

Your expenses are growing.
You have to spend money to make money. As your business grows, naturally there will be more expenses that come along with that growth. Maybe you decide to rent an office space, invest in new equipment, or hire an employee to help with the workload. These expenses may be necessary, but it means that you will need to bring in additional income, especially to make sure that you pay yourself as well.

You have more experience and can provide better service.
Something that’s important to remember is that as your experience grows, your services become more and more valuable to your clients. You will be able to work more quickly and efficiently, you will have more knowledge of the industry, and you will be able to provide them with even better services or products. The difference between our work from two years ago and the work we created this month is night and day, and I’m sure you would say the same. Going back to the first point, better work means that you will have more clients wanting to hire you. If you price your services based on value, not just on how many hours it takes, it means that as the value of your services increases, your prices will as well.

How to raise prices without losing clients

The trickiest part of raising your prices is that naturally some clients will drop off in the process. While this is completely normal, it’s good to go about this in the best way possible in order to retain as many loyal clients as you can.

Prove Your Worth.
This might seem obvious, but raising your prices before establishing your worth is probably the best way to lose clients. In general, I would wait at least one year from when you started working with someone before you even think about raising prices. Depending on how often you work with the client, you may want to wait even longer. There will be exceptions to this though, if you have a particularly difficult client, it might be smart to raise prices sooner as you’re probably spending more time on their projects than others. At the end of the day, it comes down to really putting the work in and giving every project 100% in order to make yourself invaluable.

Give your clients plenty of notice.
It’s really important that you give your clients plenty of notice. We gave our clients two months, contacting them at the beginning of November and letting them know that our prices would increase in January. This gave them time to book 1-2 more shoots at our current rate and plenty of time to adjust their budgets or find another photographer if they needed to.

Raise your prices on a regular schedule.
Raising your prices around the same time each year will allow your clients to predict the changes over time. You could even include this projected price increase in your proposal and/or contract so that they know from the very beginning that this change will be coming, even if it’s a year from now.

Don’t increase your prices too sharply.
Even if your prices for new clients have significantly increased over the year, you need to make sure that you show current clients that you care about their business by increasing your prices by a reasonable amount. Generally 5%-10% is a good range. We went through each of our clients individually and made a custom increase that made sense keeping in mind the services that we provide for them.

Wording your email

So what do you say when you’re ready to raise your rates? I think it’s important to make it clear that you value your clients and this price increase is so that you can provide them with even better service. Make it very clear how much the increase will be, and when it will take place. Most importantly, be firm while still leaving the door open for questions and communication. Here is an example of an email that we sent to our clients:

Hi Client Name, 
Hope you are well! We have really enjoyed working with you, and love seeing our work in use on your Instagram feed. We are looking forward to continuing our working relationship in 2020, and wanted to let you know about a few changes that we will be making in the New Year. 

With our business expenses increasing, we have raised rates for all new clients over the past year. We kept our original rates for all existing clients for as long as we could, but with an increase in demand for our services, we now need to raise our rates with our existing clients as well. Our goal is to be able to take on less work in order to still provide exceptional service and value to all our clients. This rate increase will still be a significant discount in comparison to what we are charging new clients. 

As of January 1, 2020, our price for each image will increase from old price to new price, and our minimum for a shoot will be new minimum. These prices are estimates and are subject to change based upon the requested images, but we wanted you to have an idea of what our prices will be for your budgeting needs. 

If the rate increase is an issue, please let us know. We have a little availability if you would like to book a shoot at our current rate before the end of the year.

Thank you for all the business that you have brought to our company, we appreciate you, and look forward to what we will create together in 2020.
Best,
Your Name

I hope this post is helpful as we head into the new year. As you reevaluate your pricing, remember that your time is valuable, and your prices should reflect that. If you want to read a little more about why we price the way that we do, check out this post. As always, feel free to reach out to us with any questions!

Is it the weekend yet?

Elle