Pain and Price Increases.
How to tell them you’re worth it…
Present it as a matter of fact, well, because it should be. Use language like ‘our prices will be increasing…’ rather than ‘I have to increase our prices…’
Be succinct. Unlike me.
Do not apologise. They won’t believe you are sincere, and at worst you’ll make the firm look weak, without direction or control.
I usually advise against giving explanations, because clients won’t really care if your staff, teabags or post it notes now cost you more. If you must, then keep it really simple, and link it to what the client gets. That’s all they care about. Use language like ‘To maintain the quality of new staff coming into the business’.
The more notice you give the less annoyed your clients will be.
In the call, the letter or the email, rip the plaster off, spare them the pointless preamble – just tell them!
For new clients coming into the firm make sure you set expectations around what your pricing strategy/increases. Telling someone in advance is a reason, telling them at the last minute is an excuse. So use language like ‘we automatically increase our fees in line with CPI each year…’ ‘We benchmark and review our fees annually to keep in line with the marketplace…’
Sell the price increases to the staff! This is really key. If staff believe their charges are too expensive then every quote they give out will come with a free apology – and clients will see it as an invitation to negotiate or shop around.
Every lawyer in the firm should know the numbers, both in their department and the wider firm. Get the FD to educate them on the real costs.
Price hygiene. Monitor that your pricing change is happening in reality, and not being negotiated away. You should also be monitoring profitability at a file level too…
Use it as an opportunity to check your pricing strategy is still valid – each department will need to do this – hourly vs fixed price? Are we still premium pricing? Have the market or our costs moved?