Are you stressed about how to tell clients about a fee increase? Are you worried that you’ll lose your clients when you increase your fees? These worries are very common among accountants who are growing their own practice but the reality is that this is business. Most clients are actually very understanding of a price increase but it comes down to whether you communicate these prices in the right way. This article, by Heather Townsend, founder of The Accountants Millionaires’ Club, gives you 15 ways to raise your fees without losing clients giving you tips for announcing the price change to implementing it.
Announcing change: how to tell clients about a fee increase
You need to announce your price increase before it happens. Make sure to communicate directly with your clients to show respect for the relationship and use these 8 tips to avoid losing clients.
Do your research and be confident – look at each of your clients, calculate your costs and mark them up to ensure you’re getting a reasonable profit. Be confident in announcing your price rise as your costs reflect your quality of work and level of service.
Be honest, positive and clear – honesty is key to maintaining relationships, so announce your price rise well ahead of time, be honest with your reasons and be as clear as possible to help them understand. Be positive about the changes and empathetic about the effect they may have on your clients.
Explain why you’re increasing your fees – clients don’t like to be surprised, especially when it comes to paying more so tell them why you’re increasing your prices. Be as straightforward as possible and you’ll find that clients will understand and respond more positively for it.
Always highlight the value – never, ever talk about profit. When explaining your price increase always link it to the value that you bring to your clients. Let them know that you need to increase your fees to continue to provide excellent service or that you’re moving with the market and your level of expertise which has increased since they first hired you.
Make your clients feel valued – flattery is a powerful tool so thank your clients, sincerely express your appreciation for their business and for helping you grow. If you make your clients feel valued, they will be more willing to continue working with you. If they feel taken advantage of or as a means to an end in any way, you will most likely lose them.
Don’t apologise – although you might feel bad about increasing your fees, never apologise. Not only does this send the wrong message about you as a business owner but there is also no need for it either. You are in control of your practice and you are raising your prices for a good reason: to provide a better product which benefits your customers. Communicate this.
Provide a clear timeline – do not ever spring a price increase on your clients, this is how you lose them. Instead, give your client time to prepare and update their own systems. Create a timeline for announcing your new fees and then one for implementing them.
Always over-deliver – if you have time before announcing your price increase, over-deliver and really impress your clients. That way when it comes to communicating this increase, your clients will be much more willing to pay more as the value you’ve been providing them will be fresh in their minds.
Implementing change: how to raise your fees without losing clients
Now you know how to tell clients about a fee increase, you need to implement them in these following ways.
Stay strong and firm with your new prices – be prepared to lose clients, don’t feel pressured to cave in on your prices. You are providing value to your clients and your prices need to reflect what you are worth. If your clients aren’t willing to pay, then these are the types of clients that you want to lose.
Use a quoting tool with the client – when you meet with your client face to face, show them how you work out the prices of your packages. Clients tend not to argue with a computer so they’ll be much more likely to accept the change.
Give your clients a choice – you are more likely to lose clients with a forced price increase, so make your clients feel that the decision is theirs to make. Give them a lower-priced option, the same old package at the old price and make this available for a limited time. Then offer them a second package, one with enhanced value that they can upgrade to. By approaching the price increase this way, you’re shifting the focus to value rather than money and your allowing your clients to choose and therefore feel good about their decision to pay more for a better product.
Make the change as easy as possible for the client – clients don’t like change, it can be difficult and expensive and it’s just a lot of effort. You want your clients to stay with you and they don’t want to have to find someone else, so make this change as easy as possible for them to implement. Announce it early, give them time to process it and update their systems and be as helpful as possible along the way. The easier this change, the less frustration they will feel, and the less likely they’ll make an emotional decision to just walk away.
Add benefits to your package – what can you add to your package to add more value and sweeten the deal? What would your clients not think twice about paying more for? You could have a meeting with clients 9-10 months into their financial year to do their tax planning (clients love to save tax so this will put them in a much better mood about accepting a fee increase) and you can review their needs for the next 12 months to ensure they are getting enough support from you.
Communicate straight away to new clients – when taking on new clients, let them know that every year in whichever month, your fees increase in line with inflation. This way, they are informed and prepared for that conversation somewhere down the line.
Test the price increase first – if you’re very nervous about having your fee increase conversations, start with the smaller clients that you don’t mind losing first. When you have multiple conversations under your belt that went well, you’ll soon build up the confidence to talk to your bigger clients and will know what to do to get them onboard. (Here are 8 ways to make your fee increase go smoothly)
Price increases often fuel times of uncertainty but if you do everything you can to communicate the increase in the appropriate way, you’ll soon find that you won’t lose nearly as many clients as you first feared. The anxiety surrounding a price increase rarely has anything to do with the price itself and more about how to tell clients about a fee increase, but if you use these 15 tips above, you can be sure that the majority of these conversations go well with very little pain and more often than not, you will be able to raise fees without losing clients.
This article was originally published on The Accountants Millionaires’ Club blog – 15 ways to ways your fees without losing clients