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How Often Should You Raise Your Prices?

how-much-to-raise-rates

When we first started out, I remember one of the most exciting things we experienced as a new business was our very first official sale from a client who wasn’t a friend-of-a-friend wedding. It basically validated that people wanted what we were selling.
 
Back in the day, we were naive to think that booking nothing but $1200-$2000 weddings would sustain our business and help us reach our goals. How could we expect to live off that, after splitting it down the middle (our business is a partnership), paying taxes, renting gear, spending 40-50 hours per wedding on the edit, shipping, etc.?
 
We quickly learned that stagnation would kill us.
 
It was then that we started playing with our offerings, how much to charge, what to include, what NOT to include, bundling vs. a la carte, etc.
 
There’s been a long road of mistakes and lessons, hence the primary reason for us starting this blog to begin with. One of those very important lessons was WHEN should we be raising our rates.
 
If you don’t properly value yourself, don’t expect anyone else to.
 
I can recall countless times when either on the phone or in person, for no reason we’d end up throwing in extra hours or extra DVDs just for no reason at all, other than the simple fact that we felt guilty about taking strangers’ money.
 
Why on earth I felt guilty I have no idea.
 
It’s not like we were ripping them off, quite the opposite actually. We’d pour our heart and soul into these weddings, breaking our backs hustling 12-14 hour days and editing non-stop until we felt what we handed over was gold.
 
Gold Jerry!
 
It came down to our confidence level.
 
We just weren’t confident in ourselves. Our product was great, but we had trouble believing we were worth as much as we were asking for, even though it wasn’t even that much money!
 
If you feel confident in your work, and know you have a solid product, stop doubting yourself and don’t feel guilty telling people how much your services cost.
 
Secondly, people can sense hesitation in your voice. If you come out sounding strong and affirmative, it makes them less likely to want to negotiate your rates.
 
What’s the right amount to raise?
 
This question unfortunately doesn’t have a right answer. You have to do what works for you and what works for your market.
 
In our experience, starting out in the $1,500 range and up to $3k, we only inched up our prices by $250-$500 here and there. It wasn’t until we reached the $3-6k price range did we experience rapid growth. For example, our average booking cost for the 2013 wedding season was $3,822. In 2014 it was $5,790, which is crazy to think now that we don’t ever book below $7,500 as of writing this article.
 
It’s important to learn the “price elasticity” of your product & your brand.
 
Price elasticity refers to how much of a change in demand (if any) you experience as the cost of your goods or services increase.
 
Does demand taper off rapidly? If so, your price elasticity is not very strong and you should consider re-hashing your product, customer service, market demographic, etc. If however, you notice that you can raise your prices by $500-$1000 and you’re still completely booking up, it’s time to push it further.
 
How OFTEN do you raise your price?
 
As you’re experimenting with your pricing and inching up, how often should you do this? Here’s the strategy we employed.
 
When booking for the next year out, we would wait to have roughly 50% of our target bookings, and then up prices by $500 (give or take). We’d book a few more, bump another $500. We’d continue this until we reached maybe just one, possibly two weddings below the maximum we wanted to do for the year. Once we hit that point, we’d up the price even further, by about $1000. OR, we would start taking things OUT of our packages.
 
Why do it like this?
 
Because what you’re doing is safely testing the waters to see what people will pay for your services. You’re safe because you aren’t really going to be in a pickle if you don’t book your last opening, and if you do book an extra couple, it’s money in your pocket and the extra workload shouldn’t kill you.
 
This strategy works, but ONLY if your product, customer experience, talent, gear, etc. are all improving as well! Raising prices just for the sake of raising prices is a lose-lose scenario.
 
There’s still a ton more to discuss on this topic
 
I could never fit everything about our pricing and sales strategies into just one blog post, which is why you should sign up to our mailing list to stay on top of new posts, and stay in the loop regarding our upcoming online course that covers this topic in heavy detail.
 
We’re offering a special promotional price only to those who are subscribed, so don’t miss out!