Is it necessary to raise your rates?

Is it necessary to raise your rates?

Ask few service providers the question – “Is it necessary to raise your rate?”. The answers would be a mixed bag of yes and no. Fair enough. There are few consultants who haven’t touched their rate for few years in a stretch and some have constantly boosted their rates in line with their economic considerations. What is the right approach? It is definitely a pretty tough question, but can be answered after few serious evaluations and self-introspections. Let us go through them one by one.

Where do you stand?
The first and foremost step is to evaluate your market standing. For instance, let us consider the situation of marketing consultants in Pune. The market is flooded with consultants, but what about their quality? Are you one among the few who deliver outstanding results? Have your services added value to the clients? If it is so and again if you have not reviewed your charges since one year, it is very much likely that you are undercharging for your consultancy services.

Economic considerations
It may sound like a good argument to align your rates with economic growth factors or inflation numbers. But these are just indicators of macro-economic scales and cannot reflect the true essence or value of your rates.

Market rates
It is definitely a good idea to explore the prices of similar service providers. You can be privy to pricing information of your competitors or cognizant of the proposals created by the other firms. Whichever way you analyze the information, you may land in further state of confusion, as we are sure that you will notice both higher and lower fee charging firms. But an in-depth inspection of these may give you the clue – quality of value created by the consultants to the clients. This makes the big difference and is definitely a good indicator to analyze whether your proposal is worth the salt in comparison with others.

Demand position
What about the demand for your work? It is only the demand that dictates the necessity of good product. Check out whether your turn over or your clientele list grown or shrunk or flat since last year? If it shows the signs of sustained growth, do not hesitate further to do both – raise your charges and also the firm’s ability to achieve further growth.

What do you need
This is perhaps the most intriguing part. Be realistic and ask yourself whether are you earning what you and your services are worth? If you feel it is less, go out for a raise. In the process of rate revision, it is quite natural to lose few clients. If you believe in your marketing skills and have good relationship with clients, your business loss due to increase in rates would die out soon. A reputed marketing consultancy in Pune suggests a smart option – gradually enforce the raise. Start the higher rate for new clients and stick to the older rates for the existing clients and gradually phase out. Rate revisions, when conducted gradually, can be justified and most of the clients would definitely agree with your demands. Have a glance through your pricing and take a sensible stand.

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