Most of us are living in a situation where prices are going up rapidly. In the UK inflation is at 10%. Now you might be telling yourself that this means you CAN’T put your prices up- people won’t be able to afford it.
There is some reality to this, but, think of it this way. If you were working for a private language school or a publisher and they told you that they couldn’t put your salary up in line with inflation, you would probably feel that was unfair. So why is it OK to tell yourself that?
Inflation is therefore the first reason to put your prices up, because otherwise you are in effect giving yourself a 10% pay cut.
What if you suspect you’re undercharging?
But what about if you’ve allowed for inflation, but you still suspect you might be undercharging?
I would say if you’re suspecting that you are undercharging, you probably are…. I don’t often come across ELT clients who are over-charging.
And it’s not about what other people are charging, because the value of what you’re offering is probably not the same. If you are consistently getting great results for your clients, that is valuable, and probably more valuable than you are charging for. What are those results worth? (It’s not about your time)
You may also be getting signals from your clients.
Wow, that’s cheap!
Sometimes clients will directly tell you you’re cheap, or you’ll see it in their face when you tell them how much you charge.
You might think this is a good thing, but not necessarily. If you’re too cheap it can cause two big problems.
1. It will make people compare you with other providers on price alone, and you may lose out because there’s always someone cheaper.
2. People may assume that if you’re cheap you’re probably not that good.
Price tells a story. You have to be able to back that story up and provide the value, but you need to tell the story of high quality and great results.
The price must be right, because I have loads of clients
The second signal from your clients s if you are busy or booked out. Again, this sounds like a good thing (and it is in many ways) BUT it also suggests that you’re undercharging. Pricing is directly related to supply and demand. If you have a lot of demand, you should put your prices up.
People worry that they will then lose clients but a) you don’t have to put your prices up for your current clients- it could just be for new ones- or you could give them a long notice period. And b) If you charge 50% more and lose as many as half your clients (which is unlikely), you’re still earning the same, but working half as much, which isn’t a bad outcome.
Difficult or unreliable clients
The third signal that you’re not charging enough is that your clients are a pain in the bum… This is a generalization, and I don’t want to say that people who can afford less are pains, but often it’s not that people can’t afford more, but that they’re unwilling to invest, which means that they don’t really value enough.
I’ve been recently working with a client who was undercharging and come Black Friday they were inundated with often quite unpleasant and aggressive requests for a discount. You may also find that you get messed about with more in terms of cancellations and so on (though this is also about boundaries).
So, are you going to put your prices up now?
If you’re an ELT freelancer/business owner you may feel a bit overwhelmed by all the business advice out there…
Should you start a podcast or a YouTube channel, a mailing list, a membership? Is it a good idea to keep things as simple as possible, or should you be looking to diversify? What does scaling even mean, anyway?!
Would you like some clear step by step advice tailored to your stage of business?
Look no further. Click the image to answer six simple questions and I’ll send you a detailed PDF game plan for your next steps.