How to Reprice Your Clients in 4 Steps

A knee-jerk reaction when you realize your fees are in need of an increase, is to raise them all by one blanket percentage.

However, raising your prices all at once will not result in a profit.

Why?

Profitability will vary depending on the client. What would a sudden rise in fees do to your relationship with them if they are currently profitable? They'll get irritated by it, and what were once your strongest client relationships will be in jeopardy.

There is an alternative, more efficient method of repricing your clients in four phases:

Step 1: Segregate your clients

The fact is, not all clients are the same. And regardless of your current pricing system, you need to audit and then segregate them into:

  1. Profitable clients
  2. Clients you break even with
  3. Clients who are losing you money

If you increase your prices by 30% across the board, for example, you would just annoy the first group, who were profitable anyway. You’d probably start to see a profit on the second group. But chances are you’d still be losing money on the third. To reprice them effectively, each group needs a different approach.

Nikole Mackenzie, of Momentum Accounting, admits her pricing was in disarray before becoming a GoProposal member: "Before GoProposal we had no defined scope. It was a challenge having every service on a fixed fee because if a client asked for something we thought was out of scope we had nothing to refer to. Everything was put together on Word or Excel."

Step 2: Reprice clients losing you money

We should start with the repricing of the third group; those who are losing you money.

Their fees need to be raised significantly.

This might involve a difficult conversation. It might seem daunting. But the fact is, they are already losing you money. Even if you lost all those clients, you would still be better off.

In fact, you would now be free to take the time you spent on those clients and reinvest it into your other clients. But, by coming to them with the right conversation and by showing them how much value you will bring, you aren’t likely to lose most of them.

Nikole managed to standardize her pricing so efficiently, she didn’t only free up more time... she was able to hand over the sales function of her business entirely.

“We’re able to show clients we can scale up or scale down their services depending on resources available to them.”

Step 3: Reprice clients who breakeven

The next step is to reprice those clients you’re currently breaking even with.

Increasing their fees by 20%-30% shouldn’t receive much friction, so long as you show them how much value you can offer.

Step 4: Reprice profitable clients

Finally, reprice the first group, those who were already profitable. They might seem like a great stopping point. They were already making you profit anyway, right? So why go to the trouble of repricing them?

In fact, you should be repricing clients who are profitable too. But with a different approach. By asking the right questions about their goals and their perceived blockers, you can start to solve "Bigger" problems for them and their business.

Remember pricing is never solved, only ever tuned.  

If these steps feel like a mammoth task, rest assured they don’t have to be. Give GoProposal a try for free and for 30 days you’ll be able to put menu-based pricing to the test with clients old and new. Insightful Accountant readers will also get two months half price when you activate with us.

“Yes, it will take a little time to set up because you want to customise it for your firm, but going forward you’ll be able to generate proposals in 5 minutes and make more money, so why wouldn’t you do it? In our second year of using GP, we increased our revenue by 20% JUST by repricing all our legacy clients for the same work we were already doing.” — Nikole Mackenzie | Momentum Accounting

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