There’s a lot of fear or anxiety when it comes to raising fees. For those in private practice, however, it’s also vital to raise fees as your business grows.
The reasons why people hesitate to take this step to increase revenues may sound familiar. Maybe you don’t want to price out potential new clients. Or you don’t want to necessarily only serve wealthy clients. Or maybe you’re afraid that by doing so, you will lose current or future clients.
These are all reasonable concerns. To achieve growth, you will need to find tactics that can help you overcome these anxieties. In doing so, you can find peace with the fact you’re charging higher rates than ever before.
Remember You’re Worth More
When you launched your business, you probably had a price per hour in mind. You even likely began to ask initial clients for that number. And there’s also a good chance you initially heard ‘no,’ and then dropped your rate to encourage them to stay.
It makes sense – you were new and you needed clients in order to get referrals and practice at what you do.
But, often, people begin to think that this number is what they’re worth. It gets ingrained in their mind that this is what people will pay for the service or therapy or other product.
Remember that your time is worth more than that though. When you have a number of clients, it becomes easier to start to recognize that your time is worth more than that. But you also have to allow yourself to believe it.
One way to begin realizing your worth is to simply start. Say you have a client that you’re charging $90. What would happen if you ask the next potential client that you will charge $100?
Will they leave immediately? Will they hem and haw? Will they accept it?
It’s a question worth asking, since it could easily work.
If it doesn’t, well you can always suggest $90 instead. But at least you tried.
My guess? They will accept it, if they were going to accept $90. By at least asking though, you’ve tiptoed into the idea of raising rates.
This will make it easier to ask next time.
Create an Annual Process to Raise Fees
If you worked within an organization, you would probably expect to receive a cost-of-living bonus every year.
This is simply the expectation that, with inflation, costs rise. As costs rise, employees expect to get paid more to ensure their paycheck keeps pace. It’s almost a formality. For you, you don’t have such a formality. But you can build it into your own practice.
By sending out a notice once a year that prices will rise, say $10, due to the cost of inflation and investment in the company to ensure better care, then you’ve made this a formal process. It’s not simply seeking the person paying the lowest amount to pay more.
This formality will maybe annoy some clients. But if you’re doing a great job, then they won’t likely leave.
But you also need to expect that some may leave. It’s this ability to look at your company and recognize what’s a viable retention rate can encourage you to take this step. If you see that retaining 90% of your clients will ensure that you do as well as the year before, even with the loss of 10%, then that’s worth doing. Plus, you can add new clients at a higher rate.
It encourages the right type of client pruning: One that rids you of the clients that likely paid the least but caused you the most concern.
Find Ways To Address Your Larger Concerns
One of the hesitations that you may have with raising rates is because you fear that you will only service very wealthy people. This is a fair concern, but one that you can address with a few different strategies.
First, it’s important to remember that wealthy people need help just as much as the non-wealthy, especially when talking about mental health or other hourly services. Sure, they have more access to it – which is likely where the concern rises – but they still need to address their mental health, like anyone else. You’re still doing good work.
Instead of avoiding the wealthy, look for ways to help the group that you seek, while charging clients the rates that you need to grow your business. If, for instance, you want to help those that cannot afford mental health care, then volunteering in your spare time with groups that provide that service can ease this concern.
Meanwhile, you can charge paying clients the rate that you need.
It helps balance the concerns with the realities of your business. But it’s well worth it, if it allows you the freedom to ask for more in the majority of your work.