As a business grows and economic conditions change, consultants often find themselves in the tricky situation of needing to increase their fees. This is a normal progression for a consulting business, but the process of communicating fee increases to current clients can be intimidating. Here are a few tips to help consultants navigate this process and implement changes smoothly.
Be Prepared to Communicate Value
Most of the time, clients don’t mind paying more money if they believe they’re getting more value in exchange. If a consultant has gained new certification or is offering new services, leverage these factors as you communicate your price increases. Even if these aren’t factors in the price increase itself, there are many easy benefits that can be implemented to soften the blow of increasing costs. Offering to send some extra reports or other similar efforts that will take little time can help clients feel more comfortable paying the extra money.
Consultants shouldn’t be tempted to just send an email or an updated invoice. To show clients they are valued, it’s important to be open and direct with changes in prices. In consulting, client relationships are everything–so take the time to make a phone call or set up a meeting, walk them through the changes, and give them the opportunity to ask questions. This can make the difference between having someone drop services out of frustration and lack of trust versus being able to negotiate, offer reassurance, and keep them on.
If the consulting firm just needs to increase revenue, a great strategy is to market add-ons, rather than universally increasing prices. Offering different packages for services can help consultants upsell their services by pointing out that another package tier might increase a client’s success rate. Add-ons help clients feel in control of their money–they get to choose to pay more money in exchange for more services. This doesn’t work in every situation, and sometimes universal price increases are needed, but adding on services is still a great way to increase profits.
It can be tempting to apologize to clients and feel hesitant when communicating changes in fees. However, this usually only makes the process more difficult. Consultants need to be confident in their decisions–price changes should be well-researched and well-justified. These conversations need to be approached with confidence so that clients feel like the services are still worth their money. A lack of confidence can make clients wonder if their consultant even thinks their services are worth the new prices, and may cause them to start looking elsewhere.