A good time for a fee increase?

Tuesday, 12 December 2017 10:07 Written by Linda Julian

By Linda Julian

Rate increases would almost never happen if managing partners waited for everyone to say “we should increase our fees now” before raising prices.

Whether to increase your fees is not the same question as when to do so.

“Why not now?” is a reasonable starting point for timing decisions.

Consider these market forces, value indicators, and competitive rivalries. A series of affirmatives flag that the time has, indeed, arrived:

your capacity to deliver services is well below demand you have generated for those services
you have moved up the value curve to produce a truly premium service with benefits well beyond the usual
your cost of production has increased significantly
your client has resisted your suggestions and attempts to reduce your real cost of servicing them
your most important rival has increased their prices
your client can discern that they are getting much greater value from your services and that you are important to their continued success
you can clearly demonstrate that you are going to deliver much greater benefit and value in the near future than your (already good) track record
you have directly saved your client from a major problem, cost, or risk and they understand your pivotal role in this
your services and expertise are central to their competitive strategy and attractiveness.

Even in an economy with low inflation, price increases are an everyday feature of our experience. Many of your clients are increasing their prices and it is quite some time since you have increased yours.

If your client can see that the value they’re deriving has increased in ways which are meaningful to them, then you’re in a good position.

However, there may be truly compelling arguments not to increase fees at all.

“Why not now?” is a better place to start than the fob-off of “later would be better”.

When you’re clear and confident about reasons for your price change, you’ll be credible and confident in presenting your increased fees. Frame this in terms of continuing increases in value and benefits to your clients.

For expert advice and help to get through the door more often and the right way, please get in touch.

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