Navigating Price Increases: Insights for Agency Clients

The last couple of years have been tough for agency owners. Cautious clients, an uncertain market along with increasing costs are all working together to impact agencies across the board.

As an accounting business which focuses exclusively on working with agencies, we’re in the privileged position of being able to see under the bonnet of lots of businesses to get a view of the key trends affecting the industry.

And one of the biggest challenges we’re seeing in the industry right now is charging the right price.

The fear of putting up prices

Many of our clients fear that putting up their prices will upset, or even lose them, clients. Especially in these financially uncertain times when everyone is struggling. However, experience tells us a different story. 

Your clients expect you to put up your prices!

Clients are aware that as with everything else they pay for, your costs will need to increase over time. And, given the current economic climate, price increases have become more and more common (and more and more necessary). It’s therefore crucial to recognise that clients are, on the whole, understanding of the need for periodic price adjustments. 

How to approach the price increase conversation with clients?

If your clients are happy with the value you are bringing to them and their business then this conversation will be a much easier one to have. And in fact approaching this conversation from the point of view of ‘value’ can be more useful than jumping straight in with numbers.

And what if I lose any clients?

While no one wants to lose clients, on those occasions where it happens (which will be less than you expect) it’s important to think about how you look at this situation. 

If you increase your prices across all your clients, many will accept the increase and a few won’t. It is very likely that the increase in sales from those that do accept the price uplift will more than offset the loss of sales to those who don’t. So you have the added benefit of higher sales from fewer clients and for less work. This will improve your profitability and therefore cashflow, while giving you less stress! 

On top of this, the clients that remain with you clearly value the work you provide as they are willing to pay more to retain your services. 

To sum up

In conclusion, while the prospect of increasing prices can be scary, clients are more understanding than you fear. At the end of the day it comes down to open communication and showing the value in what you deliver (If you want to read more about our thoughts on valued-pricing see our blog post ‘here’). Remember that clients do not live in isolation from the world around them and accept price increases when they are done in the right way with open communication.