I'm Raising My Prices. Help!

In my 20+ years of operating membership based martial arts and fitness businesses, I have adjusted my pricing for services a time or two to say the least. It can be a stressful time for a small business owner as fear of offending (or even losing existing clients) can paralyze one from taking the necessary actions to enable his or her businesses to thrive. Here are some things I've learned about price changes.

1. The First Price Is Law.  The first price you tell your client will be etched in their brain as your real and only value forever! You can add more classes, upgrade your facility, hire additional staff, and improve customer service but none of that will change the price for value relationship that your established clients already have adopted as fact. Just accept it and don't spend valuable time and energy trying to convince your client why you are worth 30% more than you were worth six months ago. It is a very difficult argument to win.

2. Honour Existing Agreements! Too often I have heard horror stories of business owners trying to justify "undoing" previously agreed pricing in defense of added services. Grandfathering pricing for existing clients enables you to put all your energy into the new pricing for the next wave of clients. This creates good will among existing clients and is perceived as fair even if new clients discover rates used to be cheaper (I too wish I had bought Apple stock in the 1990s). This is a preferred approach. It's simple and fair and allows you to enjoy the positive wave of good will as you focus on new clients.

If you feel you must address pricing of current members you have two options:

a) Set A Deadline. Let current clients know that their rates will be going up but not until a set date in the future. In the interim they will have full access to the new services being provided. This gives you an opportunity to "sell" them on the value of your services or programs. However, don't be surprised if they walk when your new pricing kicks in (see point #1)

b) Provide A Loyalty Discount.  This approach recognizes the fact that your clients are already paying you and as such they receive a preferred price on your new services. This needs to be offered with a time sensitive deadline and as a one time opportunity. It should also only be offered along with a renewed commitment to your services.

No matter what approach you take, some existing clients will leave you (even if grandfathered). Don't take this as a response to your pricing adjustment. Some people are ready and actually waiting for a reason to quit your services. Change the schedule, pricing, or staff, etc...) and BAM! You just gave them a "just cause" to quit. Let it go and focus on the clients that see your value and are paying you for great service.

In business you need to structure pricing in order that your business will thrive and grow. That means from time to time your price for services will increase. Stay the course and don't be swayed by opinions from your inner circle of existing clients. Do what is right for business's current and future health.

Cathal Walsh is co-founder of SKILLZ Canada, a martial arts and fitness organization with five locations on Vancouver Island, British Columbia. He is also a business consultant, writer and presenter. He can be reached by email at Cathal.Walsh@icloud.com.