Most of the difficulty in raising your prices sits in the conversation with clients. Handle that well and they stay, because they can see what is changing and why. Here are five steps to update your pricing with confidence and keep clients on side.
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5 Steps To Increasing Your Firm’s Pricing Without Losing Any Clients
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In this article
Updating your pricing a little every year avoids the big awkward jump. Most of the difficulty sits in the conversation with clients rather than the maths, so this article is about how you handle that conversation. Get it right and clients stay, because they understand what is changing and why.
A modest, expected change is a far easier conversation than a big correction after years of standing still. Your costs rise every year, so a small annual change keeps your pricing in step, with no large gap to explain away.
Small, regular updates also train the expectation, so clients come to see a modest annual change as a normal part of working with you. If you have already left it a while, you do not have to fix it all at once. You can close the gap in stages, so the client feels a series of manageable steps.
This article gives you 5 steps to follow to update your pricing with confidence, keep clients on side, and make the conversations easy.
Let’s dive into number 1.
Step 1: Work out the number
Before you raise anything with a client, be clear on what the work costs you to deliver. That means the time your team spends, the software and disbursements involved, and the margin you need on top. When you know that, you can see who has drifted furthest behind. Start there because that is where the risk sits and the gain is largest.
A good way to check this is against the time actually spent on each client. Even on fixed fees, keeping an eye on where the hours go shows you which jobs have quietly become unprofitable and need repricing, and which are scoped about right.
Step 2: Be clear on what clients are paying for
The pricing conversation is only as clear as the scope behind it. A lot of the friction comes from work that was never pinned down, so the client and the firm end up assuming different things about what is included.
So before you talk about the number, write down what the fee covers and, just as importantly, what it does not. Being explicit about what is out of scope is what lets you charge fairly for extra work, because the client can see it was never part of the deal.
It helps to be specific. Take a set of financial accounts. You might note that finalising payroll year-end, reconciling the bank accounts, and dealing with fringe benefits tax all sit outside the fee. A change to corporate secretarial details is a separate cost again. Spelling this out does two things. It protects you from absorbing work you never quoted for. And it shows the client there is real value in the extra pieces, so a quote for them lands as fair rather than a surprise. When the scope is clear, an update is a simple adjustment to a known service. The client can see exactly what they are paying for.
