Having legacy clients as an agency is like walking on eggshells. With every step, you must ensure that each client is treated with care and respect, while also maintaining the optimal balance of providing quality services at a fair rate. The idea of increasing prices on these loyal customers can be unnerving. It’s almost like being forced to choose between two evils – you want to maximize revenue for your agency, but don’t want to offend any clients.
In this blog post, we’ll explore the concept of how to increase prices on legacy clients. We’ll look at what a legacy client is and the importance of increasing prices on such customers.
What Is A Legacy Client?
A legacy client is a customer who has been with your agency or business for an extended time, usually years. They are the ones who have remained loyal to you throughout their entire relationship and continue to purchase services from you. Their trust in your agency is boundless and their loyalty is invaluable.
The Importance Of Increasing Prices On Legacy Clients
Increasing prices for legacy clients can be a tricky decision, but it should also not be taken lightly. If done correctly, you can maximize your agency’s revenue without sacrificing the quality of your services or alienating any customers. Increasing prices is how you stay competitive in the market and how your agency grows.
Seeking professional advice on how to properly execute a price increase is highly recommended, as it can greatly improve how your agency is managed in the long run.
Identifying Legacy Clients
Before increasing prices on legacy clients, it’s important to identify them in your customer base. There are several characteristics of a legacy client that you should be aware of.
A. Characteristics of Legacy Clients
Legacy clients are typically those who have been with your agency for an extended period and continue to purchase services. They may have a long history of working with you, a deep understanding of your operations, and may even be vocal advocates for your brand.
B. How To Identify Legacy Clients in Your Customer Base
Identifying legacy clients in your customer base is relatively easy.
Start by examining how long each client has been with you and how frequently they purchase services from you. You can also look at how often these customers are engaging with your agency, how vocal they are about the services provided, and how likely they are to recommend your agency to others.
If a customer fits all of these criteria, they are likely to be a legacy client.
Preparing for a Price Increase
Once you’ve identified your legacy clients, it’s time to prepare for the price increase. Before implementing any changes, there are several things you should consider.
A. Reasons for Increasing Prices on Legacy Clients
The primary goal of increasing prices on legacy clients is to maximize revenue. However, there may be other reasons why you would want to do this.
For example, if the market rate has increased since your customers first signed up with you, then a price increase could help ensure that your agency stays competitive and increase its valuation. Additionally, a price increase may help cover the costs associated with providing quality services at a fair rate.
B. Statistically Anticipate What Will Happen
Before implementing any changes, it’s important to statistically anticipate how your legacy clients will react to the price increase. Based on how they have interacted with your agency in the past, how likely are they to stay with you after the increase?
For example, how often do you see them engaging with your agency, how vocal are they about their satisfaction with the services provided, and how likely are they to recommend your agency to others?
Based on these responses, you can determine how your legacy clients might react to the price increase. Therefore, if a client gives negative feedback, you can take steps to address their concerns before implementing the price increase.
C. Communicating the Price Increase to Legacy Clients
Once you’ve identified your legacy clients and prepared for a price increase, it’s essential to communicate it to them in an appropriate manner. Be sure to explain why you are increasing prices and how it will benefit them in the long run.
Explain how your services are still valuable and how you’re committed to providing quality products and services at a fair rate. However, to maintain profitability, a price increase is necessary.
D. Setting a Fair and Reasonable Price Increase
When it comes to setting a price increase, it’s important to be fair and reasonable. Don’t try to overprice your services, or your legacy clients may decide to take their business elsewhere.
Instead, consider how much other companies are charging for similar services and how those prices compare to yours. Set a rate that’s fair and reasonable for your customers, yet still provides you with sufficient profit margins.
Implementing the Price Increase
Once you’ve identified your legacy clients, prepared for the price increase, and communicated how it will benefit them, it’s time to implement the change.
A. Strategies for Implementing the Price Increase
The first step is to create a strategy for how you will implement the price increase. Your goal should be to minimize any disruption to your existing customer base while still maximizing your profit margins.
Start by evaluating how much of a price increase is necessary and how you can structure the increase in a way that won’t upset current customers.
B. Handling Resistance From Legacy Clients
Unfortunately, not all legacy clients will be open to the idea of a price increase, no matter how careful you are when implementing it. In this case, it’s important to have tactics in place for how you will handle any resistance.
Be prepared to answer questions and address any objections that your customers may have. Your goal should be to maintain positive relationships with legacy clients and make sure they understand how the price increase will benefit them in the long run.
C. Explaining Why
Open and honest communication can bridge the gaps between your client’s expectations and how much your services are worth. Make sure to explain how the new pricing model will bring more value for their money, how you’re committed to providing quality services at a fair rate, and how the price increase is necessary to maintain profitability and grow your agency.
D. Price Anchor the Clients
Anchoring is a powerful technique that you can use to make sure your clients understand how much value they’re getting for their money.
For example, if a client is reluctant to accept the new rate, consider anchoring them by highlighting how it’s lower than what other companies charge for similar services. This will help the client understand why the price increase is necessary and how it’s still a great value for their money.
E. Offering Incentives To Ease the Transition
Finally, consider offering incentives to make the transition more attractive for your legacy clients. This could include discounts, free services, or access to exclusive products that are only available to loyal customers.
These incentives can help ease the transition and make sure your legacy clients feel valued and appreciated.
Monitoring the Impact of the Price Increase
Now that you’ve successfully implemented your price increase, it’s time to measure how it affects your revenue and profitability.
A. Measuring the Impact on Revenue and Profitability
Start by tracking how much additional revenue you’re generating from the price increase and how it affects your profitability. This will help you determine if the new pricing model is working and if it’s worth keeping in place.
B. Adjusting the Price Increase As Needed
Once you have a better understanding of how the price increase is impacting your bottom line, you can adjust it as needed. This could include modifying how much of a price increase you’re implementing, how often it occurs, or how you structure it so that it maximizes your profit margins.
You should also consider any feedback from customers and how they are responding to the change.
C. Maintaining Positive Relationships With Legacy Clients
Finally, it’s important to maintain positive relationships with your legacy clients. This will help ensure they remain loyal and continue to do business with you in the future.
Make sure to keep up regular communication and solicit feedback on how the price increase has impacted their experience. This will allow you to make any necessary adjustments either pricing or agency operations to ensure your clients continue to receive the best value for their money.
Get Ready To Turn Your Agency Into the 8-Figure Agency You Know It Can Be
Increasing prices on legacy clients are one of the most effective ways to maximize your agency’s revenue. By being proactive and taking steps to adjust your pricing model, you can ensure that your agency remains profitable and continues to grow.
To help you make this a smooth transition check out our blog page for additional resources and tips for managing legacy clients.
Ready To Level Up Your Agency?
If you’re ready to increase your revenue and take your agency to the next level, then it’s time to start implementing a pricing model that maximizes your profits.
By implementing these clear strategies, you can make sure that your legacy clients are getting the best value for their money and that your agency is positioned to reach its 8-figure potential.
If you need help getting started, don’t hesitate to reach out to us. We at 8 Figure Agency can help you get the business results you want. Contact us today to learn how we can help level up your agency and maximize your revenue today.
