Raising Prices Without Customer Whiplash
Here’s how to price for present and future without changing your prices all the time.
Pricing is a living being to me. It is an important organ of my business that acts as a pulse and sherpa of its future. It’s tempting to touch your prices when you’re rapidly evolving as a business, but repeat customers aren’t down for a brand with prices that change on them every few months.
Changing your prices frequently give your customers whiplash, so you have to find a way to still make the financials work while keeping your sticker prices steady.
The key to meeting your desired numbers without constantly changing your customer-facing sticker prices is by:
- diversifying your pricing portfolio, while
- anchoring it to 5-year financial projections.
Diversifying Your Pricing Portfolio
To me, pricing is not just about the front-facing retail price that everyone sees. Pricing is also about the sticker price that is most dominating my sales right now.
Even if my sticker price looks the same to my customers for a specific product, I can still manipulate my overall prices to rise by pushing other high-ticket products or variations of existing products to the forefront of my revenue model.
As long as my average purchase value rises on the back end, it means that my business’ “prices” are growing somewhere.
Anchoring It To 5-Year Financial Projections
While I’m adjusting my pricing portfolio to grow via diversification, I make sure that it’s informed by what my 5-year financial projections are telling me.
I like laying out 5-year financials so that I have a map of what my prices need to look like in order to acquire specific hires, website redesigns, new product investments, and more down the line.
You can’t spend money if you don’t have money. By peeking into what’s ahead for my business financially in the next 5 years, I can properly budget out my spending and adjust my prices accordingly so that I have the income flow to match it.
This prevents surprise price hikes and allows me to slowly scheme the evolution of my prices with strategic footing.
Having trouble pricing your product or service? Grab my Pricing Playbook to price anything.