How many times have you gotten an inquiry from an ideal client with a huge budget, but the date they want is already booked?
It’s tempting to draft an email with some lame excuse (or even radical candor!) to your current client telling them you can’t do their event anymore, and here’s the money back.
But you’re a Good human, and so you don’t do that. You made a commitment, and you’re going to keep it.
Why is it so frustrating to keep the client with a smaller budget? You finally had the big one, but you had to turn it down because you already filled your calendar with the small one.
Finally, the opportunity to level up your portfolio fell in your lap, but you couldn’t take advantage of it.
Or you could’ve swapped a red-flag client for an ideal one….
If only you hadn’t filled in so many dates with low-paying clients!
Stop leaving money on the table
You may only experience this a handful of times each year, but I can assure you that you’re leaving money on the table more often than you know.
The big bookings you miss out on are easy to see – and also the most frustrating. But the majority of the couples you book are likely willing to pay more than they did at the time of contract.
Think about it: If you raised your prices by just 5%, how many clients do you think you’d lose? It’s not that much.
3100 becomes 3255
4700 becomes 4935
12,500 becomes 13,125
I’m guessing most of the couples you currently have on your calendar would’ve paid 5% more.
And besides, those who won’t..well, they leave room for those who will. And that could be your next big one!
Why even take the risk of raising your prices by 5%?
Because it has a HUGE impact on your long-term financial future.
Let’s say you brought in $100,000 in revenue last year, and profited $60,000. If you’d charged just 5% more, it would’ve meant $5,000 more in profit. If you do that for 15 years, that’s $75,000.
That’s real money.
Here’s where compound interest makes things interesting:
For giggles, let’s say you’re 30 years old – and very disciplined at contributing to your IRA. If you took all of that $5,000/year extra you’re making for 15 years and dumped it into your investment account, it would be $135,000 instead of $75,000.
If you really want to laugh at how rich you could be, keep that $135,000 you have in your investment account after 15 years AND DON’T TOUCH IT. Don’t add any more money. Just leave it in there till you’re 65 years old. Let the market do its magic.
When you retire at 65, the $135,000 turns into $629,000.
Of course, none of this is guaranteed. But it’s what the market has done over the past several decades quite consistently.
You want to know what you’ll be doing at 50 years old when you’re too tired to do weddings anymore? Why not watch your investments grow. It’s a likely exit strategy if you do things smartly early on with your own business.
How to know when it’s time to raise your prices
Today, I’m going to share three indicators that it’s time for you to consider raising your prices.
Setting rates effectively takes time. Time to learn the skills. Time to learn how to recognize the patterns. And time to watch how your audience behaves with the rate increases.
You have to pay attention to what you’re doing, both before and during the price shifts.
#1 – You’re ahead of booking pace
The best way to know if it’s time to increase your prices is to compare to where you were at the same time last year.
Take a snapshot of your upcoming 12 months:
How many events do you have on the books?
How much total revenue?
What is the average?
If two or more of these are up over the same time period last year, then it’s probably time to raise rates.
It’s easy to know where you are right now with what’s on the books. Just total it up.
But if you don’t know where you were last year on the same date, create a spreadsheet with each event (as a row), and then make two columns for the date they booked and the date they will get/got married.
You have all the information you need on this sheet to find out what was on the books on what date going back as far as you want.
The reason booking pace is an indicator is because it shows if you’re ahead, on track, or behind last year’s numbers.
If you’re ahead, you are filling in faster than last year, and you can afford to take some risks.
If you’re tracking, it’s possible to raise rates, but be careful not to do too long if booking pace falls off.
If you’re behind, probably not the best time to increase prices. Fill in your calendar more and then give it a shot.
#2 – Dates at certain times of the year are full or filling in fast
Most wedding pros can only do a limited number of weddings at a time. Our industry is largely driven by a shortage of peak season dates, especially Saturdays during high season.
So if it’s eight months out and you’ve got three out of the four Saturdays in September filled, it’s time to raise prices. At least for that last Saturday.
want the first person to come along to book it. You want the best person to book it. And that means a higher-paying client with a better budget.
I mentioned “at least for that last Saturday” because it’s 100% possible – even recommended – to use a dynamic pricing for your business. Any time you have a limited and/or fixed supply and fluctuating demand you can use this pricing strategy.
I recommend having different pricing for different seasons. Charge your highest prices for peak season. And offer 10% lower rates for non-peak dates, which could be days of the week or times of the year. You don’t publish your rates, so no one knows you’re “discounting,” unless you tell them. And you should…when they inquire about a non-peak dates.
And yes, even wealthy people like saving a buck or two, so calm down if you’re in luxury. I’ve worked in that space for more than a decade, and I’ve seen hundreds of millionaires put the screws to me and other salespeople to shave a few dollars off a bill.
#3 – Inquiry-to-booking- conversion rates are above 30%
Everyone who sells their services needs to know what their conversion rate is. You can calculate it easily by taking the number of bookings divided by the number of inquiries.
Let’s say you booked 18 clients on 54 inquiries over the past 12 months. That’s a conversion rate of 33%. Simple.
Some people like to look at conversion rates for only those who respond after the initial inquiry email goes out, or even only those who get on discovery calls or consultations.
But this skews the numbers and covers up deficiencies in the inquiry response. One of the most important skills to get right is moving couples from “just browsing” to “I’m interested.” Measurements that skip over this skill may mask the real issue with an ineffective sales process or operator error.
Katy sold for 20+ years around a 20% conversion rate for combined unqualified and qualified leads. Basically, anyone who inquired. I was about the same. And we worked for companies that spend considerable time studying target market price elasticity, which means we pushed the prices as far as they could go without breaking the business.
If you’re booking at a significantly higher conversion rate, you’re either a) not charging enough, or b) significantly better salespersons than me or Katy. (If it’s the latter, please email me at email@example.com and put “I want to be a sales coach for you!” in the subject line.)
You’re supposed to hear “no” quite a bit as a salesperson for your services. If you do, you’re pushing the limits of the value proposition. If it’s too easy to book, you’re not taking enough risks to get higher-paying clients.
If your conversion rate is high and you’re still not getting enough bookings, the most pressing issue to solve isn’t your pricing or sales process. It’s the number of inquiries you’re getting. Or, more accurately, NOT getting.
The first place to look is your website. Take the number of unique visitors to your site and subtract how many inquiries you received in, say, a three-month period. The difference between those two numbers is how many people did NOT warm up to your website.
(If you’re not getting enough inquiries, you can also reach out to me at firstname.lastname@example.org, and I’ll help you figure out what’s going on with your marketing strategy and/or your website.)
Decrease your fear to increase your prices
The most likely reason you’re not getting paid the amount you deserve is because you’re afraid of asking for it. That’s okay. That’s human nature. We don’t like to be rejected – and will create all kinds of coping mechanisms to prevent us from feeling that way, including not putting ourselves out there for potential failure.
If you see any of these three signs that you could charge more, and especially if you see more than one or all three, the only obstacle standing in your way is, well, you.
If that’s the case, again, feel free to reach out to email@example.com. I’m happy to be your hype guy and get you in the mindset to feel 100% about charging what you’re worth.
Say no to the little things
I started off talking about how you had to pass on the big thing because you had a small thing in the way. This doesn’t just happen to bookings on your calendar. It happens every day of the year.
And in all different areas of your life. That’s because you’re trying to do too many things and not prioritizing what’s most important to your success.
Tired of running out of hours in the day? Or days in the week? Or months in the year? Katy and I like to say the days are long and the months are short, because we always feel like we’re doing so much, but it’s never enough time.
In this week’s episode of Own Your Business, I share my insights on how to free up more time to spend on priorities for your company. I’ll cover:
My #1 tip to increase your productivity
Why we become less effective the more we have on our plates
6 practical ways to say no more often