Will You Lose Clients If You Put Your Prices Up? 3 Pricing Truths to Know First

Worried putting your prices up will mean losing clients? If you know your business needs to make more money, but raising your prices feels risky, there may be more than one way forward.

“Just put your prices up.”

Yeah right.

If it was that easy you would’ve done it by now, right?

Because the problem isn’t that you don’t know increasing your prices could help you make more money.

If you're like many business owners, you’re worried about what happens if you do.

What if your clients won’t pay it? What if you lose them? What if, especially right now, rocking the boat means losing income you really can’t afford to lose?

But there’s another problem.

Your business still needs to make more money.

Maybe you’re not paying yourself enough. Maybe there’s never quite enough left at the end of the month. Or maybe you’re earning okay money - but only because you’re working way harder than you ever intended to.

So what do you do when you need to make more money, but putting your prices up feels too risky?

Well, the good news is that putting your prices up isn’t your only option.

Sometimes it absolutely is the right thing to do. But sometimes your prices aren’t actually the problem.

So before you decide, there are three pricing truths I want you to know…

Truth #1. You don’t always have to increase your prices to increase your profit.

The price tag you put on your services is just one lever you can pull to improve how much money you get to make and keep (there’s actually 5 others you can use as well).

If your prices are already reasonable and well priced, but you’re still not making what you want or expected, it usually means there’s a different hidden profit leak going on that we need to plug first.

Sometimes it’s about finding smarter ways to deliver value…

Or creating a “service ladder” with different price points to meet smaller budgets without losing money…

Or uncovering what your most profitable service is and prioritising that…

The answer doesn’t always have to mean “just put your prices up”.

Sometimes the problem isn’t your price. It’s what it costs you to deliver it.

This is one of the things that can be really difficult to see when you’re in the middle of running the business.

On paper, the price of a service might look perfectly reasonable.

But if you quoted based on 10 hours of work and it routinely takes 20… or your most expensive team member is doing work someone else could deliver… or every project has become completely bespoke and takes far longer than it needs to…

the price on its own doesn’t tell you whether that service is actually profitable.

Which means putting the price up is only one possible solution.

You can also look at what you’re selling, how you’re packaging it, how it’s being delivered, who is delivering it, and which services you actually want to sell more of.

Like Rachel.

Who found they were delivering x4 as many hours as she was charging her clients for (spoiler alert: most businesses deliver x2 - x3 more hours than they’re charging for).

But we didn’t quadruple her prices!

We just found smarter ways for them to deliver, and then packaged up their services into more bite sized offers so they stayed affordable for her clients but were finally profitable for her.

Within 90 days she was paying herself generous salary every month and no longer work in evenings and weekends.

That’s why I’m very wary of blanket advice that says the answer to a profitability problem is always to charge more.

Sometimes it is.

But first you need to know where the profit is actually leaking out of the business.

Truth #2. If you do need to increase your prices it’s usually because you’re underselling yourself. 🙈

Even in the last six months, during some really tough times in business, many of my clients have successfully increased their prices and gotten more clients.

Why?

Because they’d been underselling themselves for years. And their clients knew it.

So increasing their prices wasn’t about taking advantage or “ripping them off”.

It was just about getting better alignment with the huge value they provided with the money they earned for delivering it.

Take Karon. She was an amazing website developer with over 20 years experience.

She suspected she might be undercharging (she was certainly over delivering!), but she worried her people wouldn’t pay more. However once we calculated the huge value her services provided she got the confidence to charge what they were actually worth.

She put out four proposals (to her current client base) using her higher prices and 3 signed up within 24 hours. She made an extra $10k in just one week.

Because her prices finally aligned with her value. And her people knew it!

So it’s not about making your prices expensive.

It’s about taking them from being too cheap and unprofitable, to affordable and profitable.

And this is an important distinction.

Profitable doesn’t mean overpriced.

Your prices need to cover the real cost of delivering the work, contribute towards the costs of running the business, and leave enough money for you to actually benefit from doing the work.

If they don’t, something has to change.

And as long as you get your price increase right, if the “worst” does happens and you lose a couple of clients, typically the incremental revenue you make from the new prices more than makes up for the one or two clients who might leave - and you then have space to take on more clients at your more profitable rates.

Meaning more money for you for less work. #winning!

So it’s definitely worth asking yourself: are you underselling your services…?

Because if the answer is yes (or even a reluctant “maybe”…) then finding the right way to adjust your prices is worth exploring.

And if you’re not sure, this is exactly the kind of thing I help my clients figure out.

Truth #3. Sometimes it’s not your prices, it’s your clients. #SorryNotSorry 🙊

This is the harder truth.

If your current client list has grown organically through referrals from the friends and family you started with, you absolutely can end up with a client base that genuinely can’t afford (or don’t want to pay) profitable prices.

I see this all the time.

You start out on super low rates just to get you started. Friends and family take you up on it and happily refer cos it’s a freaking bargain. But they typically refer you to other people who are also only looking for a freaking bargain.

So your business grows, but your profit (aka your personal income) doesn’t.

Now you’re more experienced, more confident, more valuable. AND you now have a team to pay and more costs to cover.

But you feel stuck cos your clients are setting your prices and the math doesn’t math!

This is super common, and is a normal evolutionary stage of a grass roots business. It’s all part of the journey. But yes, it can be hard to navigate!

In this case the solution is finding that new client base, who can afford your more profitable prices and attracting more of them. (Often while also finding ways to still support those with smaller budget, but without it damaging your own finances.)

Like Bec, who’d been in a “rut” for years feeling stuck, believing no-one would pay more for her services.

But once we found a new niche who were happy to pay her higher prices, she signed up not one, but six new clients within 3 weeks, and made an extra $30k just like that.

The important bit here is that Bec’s problem wasn’t simply “your prices are too low.”

If the people you’re currently selling to genuinely won’t or can’t pay what you need to charge to make the business work, changing the number on your proposal doesn’t solve the underlying problem.

You have to change who you’re selling it to.

And that doesn’t necessarily mean dumping your existing clients overnight.

It means building a deliberate transition towards a client base that values what you do and can afford to pay a price that works for them and for you.

So, which one is it for you?

Before deciding you either have to put your prices up or resign yourself to earning less, it’s worth figuring out which problem you actually have.

You might be over-delivering - so the service could be profitable at its current price if you had a way to manage scope creep and to stop giving away so much for free.

You might be underselling - so your clients are already getting considerably more value than they’re paying for and there’s room to increase your prices.

Or you might have outgrown your current client base - and the next stage of your business needs a different kind of client.

And sometimes there’s a combination of all three.

Now, luckily not everyone needs to do All. The. Things. to get the results they want - it’s totally dependent on your situation, your goals and where your profit leaks are.

BUT figuring out what’s right for your situation and what’s your best next step can be hard when you’re also in the middle of it.

Sometimes it can just help to talk about it with someone who gets it.

That’s what my free Profit Discovery Sessions are for.

We can look at what’s actually happening in your business, where you may be losing profit, and whether increasing your prices is actually part of the answer - or whether there’s something else we need to fix first.

Whatever you decide to do - price increase, or no price increase - just know you’re not alone.

And if it feels hard to decide what you should do next, that’s cos it is. It’s not you.

You don’t need to fix everything. To start with, you just need to know what actually needs fixing.

And then go from there.

Cos you are worth it 

Natalie