Small Business Advice
Prices reflect the worth of your products or services
"Not everything that is faced can be changed, but nothing can be changed until it is faced." ~ James Baldwin
As many readers of this column know, I compete in dog obedience trials with my wonderful Labrador retriever, Sophie. I would not be nearly as successful in this as I have been without the assistance of my incredibly talented dog trainer and coach, Ann Summers.
I have been pleased with Ann’s training and support over the years. She clearly realizes that it is me who really needs the training, but always humors me and pretends that it is Sophie who needs it.
Ann has become very well-known for her dog training, and her client list continues to grow, which is precisely what you would expect as word of her skill spreads.
The downside of a growing client list for Ann is that class sizes are getting harder and harder to manage. Knowing she needs to downsize some to keep from sacrificing the quality of training she provides, she recently asked me what I thought about raising her prices.
In fairness, I have actually been encouraging Ann to up her prices for a while. Since I have been working with her, she has never once raised her rates. She still charges just $10 a week for a 60- to 90-minute class every Saturday morning. She has always resisted making a fee change.
Dog training is not her main source of income, but she still wants to ensure that the fees she charges are fair to both herself and her customers.
I did some quick research on her behalf and found that most dog trainers in this area are charging about $25 per dog per class. I asked some of her other clients what they thought about the value and price of Ann’s training, and they all said they would gladly pay more. They each felt the benefits to both their dog and themselves would easily justify paying a higher price.
I explained to Ann that many people relate value with price and, if her price were too cheap, people would assume the service is cheap as well. Though this clearly does not seem to be happening here, I recommended that she concentrate on her customers’ perceived value and raise her rates to $15 per class. While she might lose a few customers, the additional revenue would more than make up for any losses. As a bonus, class sizes would be smaller, and she would be better able to provide a higher quality of training to those who remain.
She is still concerned that her customers will leave if she raises prices. As a consultant and friend, there is only so much I can do to convince her that this fear is unfounded and is preventing her from making a necessary change.
Now go out and make sure you do not have any beliefs or fears that are limiting you from raising prices. If you do, make sure you address them.
You can do this!