How & When To Raise Your Rates
I’m fairly certain you became a health coach because you’re passionate about health and nutrition, you want to help people, and you want to earn a great living.
I know that last part can be tricky.
During nutrition school, you learned a ton about food, health, and how to help your clients get results. But what you might not have learned much about is how to use your newfound knowledge to create a profitable business.
As a result, talking about the financial end of your business can be confusing and uncomfortable.
I speak with many coaches who seem to almost feel uncomfortable at the idea of charging for their services. As a result, they keep their rates low.
But here’s the deal… undercharging impacts how potential clients perceive the value of your services. They may think your programs are sub-par and wonder if they can really benefit from them. (It’s true. I promise.) And, you’ll continue to struggle to meet your revenue goals and have trouble making health coaching a feasible source of income.
So today I’m diving into the important topic of how and when to raise your rates.
Why Should You Raise Your Rates?
First off, you should know that almost every business owner and service provider feels uncomfortable about raising their rates. It brings up thoughts of “Am I worth this much?” and “Will anyone pay that?”
But remember this – you are worthy of working with people who understand the value you bring to their lives. And, the more people pay, the more committed they’ll be to “doing the work.”
If that hasn’t convinced you to charge what you’re worth, let’s put it into more practical terms.
If you’re charging too little you’ll need to sign-on more clients, and put in more hours to earn a decent living.
Here’s an example:
Let’s say you are charging your one-on-one clients $100/month and you need to earn $2000/month from your business. That means you need 20 clients.
You can see, in the chart below, that by slightly increasing your rates you can take on fewer clients – allowing you to provide a higher level of service.
|Percent Increase||Base Rate||25%||50%||100%|
|# of clients||20||16||14||10|
Taking on a large number of one-on-one clients can be exhausting and cause you to burnout… which means your health suffers and you can no longer serve anyone.
And, when your clients aren’t paying what you’re truly worth, it can lead to resentment and feeling that it’s not worth your time.
If you’re feeling good about working with a larger number of clients, you can see in the chart below how much your monthly revenue would increase if you raise your rates.
|Percent Increase||Base Rate||25%||50%||100%|
|# of clients||20||20||20||20|
Now that you’re convinced that you CAN and SHOULD be raising your rates, let’s talk about the best times to do it.
When Should You Raise Your Rates?
You can raise your prices anytime you feel like it. After all, you’re the boss :).
But if you implement rate increases strategically, it will allow you to feel more comfortable with the increase and be able to “own” the numbers.
Here’s when I recommend increasing your rates…
When you’re starting out as a new coach
When you’re just starting out, you’re likely to keep your rates low. That’s actually a smart decision because it allows you to easily sign on clients, gain experience, get testimonials, and gain confidence.
What you want to avoid is KEEPING your rates low.
When I was new health coach, I started with a low rate of $75 per month. (That included two sessions per month.) Every time I signed on two new clients, I raised my rate by $25 until I reached $200 per month. (Disclaimer – this was 11 years ago. If I were practicing health coaching now, I’d certainly charge more! Click here to read my post about pricing your programs.)
This worked really well for me because it allowed me to get comfortable with the investment I was charging and I felt very confident when I shared my rate with potential clients.
When You’ve Made Improvements To Your Program
The best reason to raise your rates is directly tied to the results you’re getting for your clients. If you’ve made major improvements to a program or service that your current clients are loving, it might be time to bump up the price. After all, results are what people pay for!
When You’re Booked Solid
If your client calendar is booked out and you’ve got a wait list of clients wanting to work with you, it’s time to increase those prices! This generally means that you’re great at what you do and people are recognizing that.
When You Add Credentials Or Certifications
If you’ve just become more qualified to deliver a service or program to your clients, this is a great time to consider raising your rates. You’re more of an expert and should be earning expert rates!
When You Re-Launch A Program
Launching an already successful program for a second or third time is a great time to increase the price. The first couple of times you launch a program are often more of a test run, but once you have clients who’ve experienced results through your program and can attest to the benefits of working with you, you can bump up the price. Your programs will be more in demand once you have those killer testimonials on your sales page.
How To Communicate Your Rate Increase
Strategically raising your rates involves strategically communicating your decision to your clients and network. This isn’t something you want to spring on people :).
Chances are your current clients have paid in full or are set-up to pay a recurring amount each month. These clients won’t be impacted by your price increases unless they decide to re-enroll and continue working with you. In this case, you can simply give them a heads up before you start that conversation.
Your List & Past Clients
For people that aren’t currently working with you, you can give them a little less notice. One or two weeks is enough.
Negotiation and pricing expert Devon Smiley says this is also a great opportunity to quickly fill client slots in your calendar. “Send a ‘heads up! last chance!’ email to your community to let them know that new prices take effect in a week (not too much notice, they’ll just drag their heels) so if they want to buy at the old price, now’s the time.”
Anyone who’s been waiting to work with you will be motivated to sign up now. That means a quick boost in clients and revenue for you now at your current rate, while setting you up for success with higher paying clients in the near future.
For A Program Launch
If you’re re-launching a program, you can offer the program at the current rate in two ways:
- As an early bird promotional price. The program price will go up after a certain date.
- One last time at the current price. The program will never be offered for this rate again.
Either option involves using a scarcity pricing technique that encourages interested clients to sign up faster.
Once you’ve let your network know about your price increases, be sure to update it on your site and any other marketing materials that list your prices. Then get out of the house and celebrate your brave decision!
Now I’d love to hear from you!
If you’ve raised your rates, share how and when. If you haven’t yet raised your rates, what questions or concerns do you have? Share your questions and comments below so I can support you.