Should You Raise Your Prices?

Hi, this is Dave Kats with Therapist Consultants and I have a tip for you. Every so often, we need to raise our prices to keep up with inflation and keep up with the costs of the changes that are happening in our business world. Here's how you raise prices. First of all, you should notify people at least a month ahead of time. When I say notify them, I mean just put a sign out where they check-in or a sign out where they can see it and do it about a month ahead of time because some people, you only see once a month. If you only see them once a month, they might come in and find out that the prices were raised and they didn't know it. If you had raised your prices and put a note out a month ahead of time, everybody sees the change and then they know it when they come in. That's the first thing.

Second thing, we suggest that you raise your prices less frequently, but more substantially when you do. Right now, if you're at $150, you can certainly go to $175. I talked to one lady who was going from $150 to $165. There's no difference between $165 and $175 and their minds so you might as well go from $150 to $175. If you're bold, you can go from $150 to $200 and think about that, or $150 to $180. You think about doing that because it makes a huge difference in your practice. Just think, in your practice, if you saw just 10 people a week and you raised it $25, that'd be $250. If you see 20 people a week, that'd be $500 more a week that you would be bringing in. You take that times 50 weeks, you're talking about a lot of money. You're talking about $2,500 that you could bring in very quickly. All I'm saying is this. When you raise prices, raise them more substantially. If you're at $200, probably go to $240 or $250, raise them more substantially. When people ask you about the prices, and by the way, everybody, every therapist is concerned, “What if there's a backlash when I raise my prices?” First of all, there's not going to be. I've been doing this since 2011 and I don't ever remember any therapist ever telling me that there was a backlash because they raised their prices substantially. Raise your prices. Don't worry about them.

I had one therapist, he was busy all the time and he was doing about $13,000 a month every month. One day, his statistics came across my desk and he went from $13,000 to $16,000 in one month. Next time I talked to him on the phone, I said, “I bet I know what you did recently.” He said, “What's that?” I said, “I bet you raised your prices.” He said, “How'd you know?” I said, “Because you've been doing $13,000 every month for six to eight months and now you jumped up to $16,000.” Think about the effect that that would have on your practice if you raise your price. $3,000 a month is a lot. You take that times 10 months, that’s $30,000, 12 months is $36,000 more. By the way, raising prices is about the only thing that you can do that's 100% profit to you. Raising prices is about the only thing you can do that’s 100% profit to you so think about raising your prices. Don't put it off.

When you raise your prices, you'll go from being below the average in your area to above the average in your area, and then they'll slowly catch up, and then you'll raise your prices again. This is Dave Kats. Think about raising your prices. Don't wait for a certain time. Now it's time. It’s as good a time as any. This is Dave Kats. Thanks for listening.