When to put prices up?

[Annette Bowen]

A few people have told me that I'm too cheap and don't charge enough for the services I provide, which is probably true, I started with what I felt was a fair price for my skill level, but haven't changed that price over the last 3 years even though I'm now more experienced with animals.
So I'm looking for advice on how and when I should put prices up.
I'm thinking the start of the year is a good time.
How often do other practices put their prices up? annually? every 5-10years? when you look at the finances or compare to other practices?
How much do you put it up in one go? $5,$10 ... if you go a lower amount do you put it up regularly? (I guess this is related to how much you should be charging compared to how much you are currently charging (or undercharging!))
Do you/ or how do you notify clients of the price increase?
Did you experience any negative feedback from clients and any tips to reduce or manage this?

[lehughes]

All great questions Annette!

When do you put prices up? All of the above: When finances dictate, as inflation rises (i.e. every year), when your skill level goes up, during a recession!
I have to tell you that it was a physio friend of mine from the UK that told me the last one. She said that whenever times are tough, she raised her prices, and it always helped her to get through.

How much? Well, yes, that does depend on how much you are undercharging. I always have this argument with my husband, who has been undercharging for years (as a heavy duty mechanic). What $ amount would actually help & make a difference to your life / practice? So if you are struggling to make ends meet, then you likely need to go up by 10 - 30%! Seriously! If you are just looking or an inflationary increment, then you go up by 2, 3, 4, or 5%.

People expect prices to go up.
Now, two trains of thought about letting people know. When we raised our prices a couple of years ago, we let folks know. We went up by 15%. We sent a letter telling folks that it was either that or we were contemplating closing. Anyone that made mention of the letter was sooooo relieved that we were JUST raising prices. So that was a win.

My hubby raised his prices by 25%... but as a mechanic, farmers need their tractors fixed when they need them fixed. I doubt anyone actually knew his hourly rate before hand. They know they're going to be charges hundreds or thousands of dollars for the repair anyways. So on a $1500 bill, will they notice the extra $50 - $75? No! He raised his and nobody said anything!

My brother-in-law ran a website development / management company. He sent out an e-mail when he increased his prices, saying that he hadn't increased prices for 7 years. And I was shocked by my own reaction: "Since when does a web-IT-guy think he's worth $130 / hour??" But if he didn't say anything, I'd not have noticed or had any negative thoughts!! Weird psychology, eh?

Now, with rehab, people are paying every time they see you. So they will notice. So my suggestion is that if you are doing a big increase, then let folks know and let them know the reason (i.e. like the letter we sent to our clients). If you are doing a small increase, then just implement it... if people ask about it, the answer is "inflation".

And spend some time in front of the mirror practicing your replies... and some time working on your inner psychology to tell yourself that you are WORTH charging more and that it is fair! I've found that your inner dialogue can be more destructive than anything else!

Best of luck!

Laurie

[Annette Bowen]

Well it is decided, my prices are going up on 1st January, for humans, dogs and horses. Decided to go with a $5 increase as it keeps it a round number, and my travel fees are doubling per km as they really needed to. (I had to get the vet out to one of my horses recently and holy moly the travel fees!, my new fee will still only be about 2/3rds of what the vet is charging)
Last year I sent all clients a Christmas text message with links to my new website and fb page. So this year I'm planning to also say something like 'click through to view 2017 prices' and will have a page on the website and fb with a few reasons why the prices are going up, inflation, rising cost of fuel, the fact that I provide longer consults than many others.
You are so right about the internal talk being one of the biggest factors. Really if anyone doesn't want to pay me an extra $5 then they clearly don't value what I am doing for them, and are not an 'A' class client.

[lehughes]

Good stuff Annette!
You're 'self talk' sounds healthy!!!
So HAPPY NEW YEAR to you!!



Laurie

[tania]

Last year Laurie told me exactly what she just posted. I was scared to raise my rates and thought i would loose clients. I raised them last January by 20%. I think i only lost one client, the rest said, "it is about time you raised your rates"!
My rates now are closer to others near me, but i plan on raising them again in April.

My thoughts now (thanks Laurie) i spent 7 years barely able to pay my bills, so now it is time to get paid for what all my years training, deserves.

may 2017 be prosperous.
tania

[Annette Bowen]

Thanks Tania, that's reassuring to hear.
Merry Christmas and Happy New Year to you.

[JaneHK]

Well, this kind of fits here.

My (prospective) rental and refurb prices are astronomical (because property lease only 3yr and landlords will force you to move on here)- hence I am still running a mobile -rehab only service. BUT I WANT A CENTRE, that has an UWTM and an armchair (not a damn car seat) and can be more cost efficient for more clients for more frequent visits.

Looking at the cashflow, it has been suggested that I can probably make it financially viable if I increase prices by 20% but then I definitely won't be attracting the new clients looking for a more cost efficient route to rehab. Any thoughts?

Also, I just did a count and 25% of my patients from the past 2 years are dead! Yes, many geri's and no sporting dogs. The still living ones are post op ortho/ neuro and I (tend to) make them better. (except the ones in my other posts). So maybe this is another question- how to attract long living/ long needing patients? Again, I see having a centre allows more frequent revisits.

It would be great to know your thoughts.

[lehughes]

I just read back through this thread! And you're right Jane, it is a good one! And oddly enough, just tonight, I'm having yet another conversation with my husband about prices, changing for his time, and not feeling bad for the farmers that are cutting hay and making bales and not paying him for 6 + weeks!!! Send them a reminder invoice! Okay... I see I'm on a rant here.

Right, so to make things make sense, I think you need to 1) build up a stream of maintenance clients. I hate for patients to get 'fully discharged'. I want them to remain as maintenance clients for life - maybe 3 - 4 times a year. I just taught a course this weekend, and most of the clients I invited to bring dogs, I have known and treated their dogs for over 15 years. Some are near 20 years! THAT's what you want to get.
How are you advertising?
Are you targeting breeders? Sporting people?

Not even knowing what you charge - raise your prices. We are terrible at this. If 20% feels daunting, then do 15%... but you'll likely need to raise prices for sure.

As for the UWT... it's catchy, but a big investment for not as much return. Maybe don't rush into it. There's a lot you could do with a land treadmill!

Laurie

[JaneHK]

Hi Laurie - thank you. I increased prices for my initial assessments and become more focused on adding travel/ parking etc. I have also built in a review at 3 or 6 mths, depending on the case. Good times.
And, I have created a whole new bath tub protocol for post op IVDD toy breeds!!!

[lehughes]

Good on you Jane!

(Shoot me an e-mail about your Toy Breed Tub Protocol... perhaps it might make a good piece of educational content for FourLeg!)

Cheers,

Laurie