Raising the Bar, Not the Brush: A Guide to Justified Price Increases
As a painting contractor, you reach a point where you realize the shortchanging must stop. The light flickers, your eyes open, and you conclude that it's time to stop underpricing your services. It's time to halt the hidden theft from your family's livelihood. The call to action here is to understand how to break the news to your loyal, existing client base that your prices are going up. It's time to navigate this steep terrain and maintain your client relationships simultaneously.
The moment you've decided never to undertake cheap jobs again is significant. Perhaps it's the day your phone rings, and it's your first client, the one who gave you your shot. They adore you, refer you, and believe you are remarkable. The question that arises is, are you going to succumb under the weight of loyalty or stand your ground with the newfound conviction?
Mindset Adjustment
The first step towards raising your prices is adjusting your mindset. You need to understand that you are not being unfair, or betraying your clients in any shape or form. Moreover, you need to value yourself and your work. If you perceive yourself as a low-earning individual, then that's all you'll ever make.
Your worth should reflect in your prices, particularly if you're adding value to your clients. A while back, I interacted with a landscaper. His business was on the verge of collapse because of underpricing, yet he still hesitated to raise his prices. Despite having a robust business, the profits were minimal because of low rates.
He was initially hesitant, but eventually, he raised his prices by about 62%. The result was shocking. Out of his 100 clients, only eight left. The significant fact was that these eight were the most demanding and least profitable. By raising his prices, he managed to triple his gross profit without losing much of his customer base.
The takeaway from the landscaper's story is that once you add value to your services, you should feel confident about raising your prices. Your mind must be prepared for the shift.
Delivering the Facts
Knowing when to raise your prices is one thing, but conveying that change to your customers is another. When it comes to this, the key is not to defend the price increase, but simply deliver the facts. Whether you're providing recurring services or one-off jobs, the approach remains the same.
Send an email, message or contract stating the new pricing for the upcoming season or project. No explanations, no justifications - just the facts. However, if clients question the price increase, your response should be straightforward. Acknowledge the previous underpricing, state your reasons for the change, and then keep silent. You've said what needs to be said. There's no need to defend your actions further.
Moving On and Prosperity
After raising your prices, the next step is to move on. It's crucial to understand that this is your business, and you set the prices, not the customers. As the business owner, you make the decisions regarding what you charge, who you hire, which vendors you collaborate with, and where you work. So, start acting like the boss that you are. Make the necessary decisions that benefit your business and move on. This is what a leader does.
Always remember, the right people will stay with you. Those who respect what you do will continue to hire you and refer you. This is especially true if you've been delivering great value over time. But if you're not providing enough value, you don't deserve to raise your prices, no matter how skillful you are at your craft.
Conclusion
Raising your prices as a painting contractor is not a task to shy away from. It's a crucial part of ensuring your business remains profitable and sustainable. But it requires an adjusted mindset, a factual delivery of the new pricing, and the ability to move on after the announcement. With these steps, you'll be on your way to better profitability while maintaining valuable relationships with your clients. And remember, it's not just about raising your prices; it's also about consistently delivering great value.