Are You Doing Price Increases With Your Members?

Hello and welcome to Mastermind Mastery, the podcast for professionals who want to create and run successful peer advisory councils, or as we call them, PACs for short, or they're also known as peer groups or business mastermind groups. I'm your host, Tina Corner Stolz, founder of Elixir Council, where I've been in the industry running groups since 2005 and now help those like you with education, certification, and support wanting to do the same. At one time, I ran 10 groups, nearly 100 members, and sold my groups For a Good Multiple and recently released my second book, Your Seat at the Table: How to Create and Run Your Own Peer Advisory Councils, published by Forbes, and grateful to you that it's an Amazon bestseller. I invite you to join each week where we share strategies and techniques to successfully launch and become a master of running your PACTs. You'll hear insights, perspectives, dos and don'ts, learn from my and my guests' mistakes, successes, and get the inside track to key takeaways. Each time we have a guest, we'll be having a bit of fun. So are you ready? Let's get going and dive into today's episode.

Hello everyone, friends, listeners, anyone that's out there running peer advisory councils. Welcome to another episode of Mastermind Mastery, and I'm your host, Tina Corner Stolz. Today's topic and episode is based on raising your pricing, raising your membership dues. How many of you out there actually do that on a regular basis? How many of you have a process to do that? And how many of you haven't done so in who knows how long, and you've wanted to do so, but now because you haven't done it, you don't even know how to go about doing it because it's going to raise this huge flag because you've never done it. And now it's going to cause attention to what your pricing is and what it is that you want to be. And is there too much of a gap between what you do charge and what you should be charging that now you're so far behind it's almost impossible to close that gap? Well, today we're going to talk about how you can do all of it. I'm going to talk about how to make it taboo so you feel comfortable doing it without losing a member, where it's not stressful and you get paid what you should, what you're worth, and what you you deserve. So let's start with why even raise pricing. I know moderators, chairs, etc., that who never raise prices, never. And that's fine if you're a lifestyle business, and if so, no need to continue listening. But if you are treating your mastermind pack business as a business, raising prices at some point is essential to sound business strategy. Truthfully, I also believe if you do not raise prices, some part you lose respect from your members because in the back of their mind they're realizing over their years of participating you haven't done it and that you're actually not running the group like a business. And if you're not running the group like a business and more of a lifestyle business, are you really doing the best job possible? Are you taking it seriously? Something to think about. Let's get back to why do it. Well, first of all, because of the standard cost of living. If you do not, then basically you're giving yourself a demotion every year and your members a value which you don't get any credit for. So they got to keep their dues the same year over year, basically at a discounted rate year over year because of cost of living. Does that sound like a good strategy to you? At least if you don't raise your pricing, get credit for it by sending out a note indicating you're giving them a gift, that their pricing is the same this year, and that you appreciate their business, etc. Don't just not say anything at all. So let's talk about what to do about raising your pricing. When to do it, and we're also going to talk about how to do it. First, like, when to do it. You know, it's always a good time, kind of year-end or the beginning of the year, because it's kind of expected. But honestly, it doesn't really matter when you do it, just as long as you do do it. But I will tell you, it's best when you feel you have justified the increase, that the value is high, meaning you don't want to raise your pricing if you've just had some turnover in your group. Right? And you might be thinking, uh-oh, I don't want to raise this issue because everybody might be evaluating whether they're going to continue or not. But let's talk more about some things to consider so that you can actually feel comfortable raising your pricing, know how much you should raise it by, and how to go about it in a really positive way. First, you have to understand your costs. Now, I know many of you will say, well, there's not much cost in running a group, but there is an understanding everything that goes into it. Your time, which is valuable and does cost. There's an opportunity cost as well. So understand your costs before raising your prices. Thoroughly understand them. That includes everything, your overhead, what it costs you to run the meeting, what it costs you to sell a new member. You can even include that in it. But ensure that your pricing reflects the true value of your service, but also the true value relative to what your competition is doing or other related services that are close to you that your members consider when they're thinking about whether they're going to be in your group or do something else. Value communication. Clearly communicate the value of your service, this, of what you provide to your members. Emphasize any improvements, additional features or benefits that you've implemented over the course of the for years, anything that justifies the increase. It could be that you've added more socials. Maybe you have added more speakers. Maybe you have added kind of a better environment where they meet. Who knows what it could be? But make sure that when you communicate, you reiterate the value that you are providing. Which brings to transparent communication. Be transparent about the reasons for the price increase. If there are specific factors such as rising costs, maybe improved service like we've just talked about, explain that and be open and honest because it helps build trust. Like, you have to think about why now. Why am I getting this email as a member that you're raising my pricing? So you don't want to come across though as defensive or overly like communicative in regards to feeling like you are having to justify out the wazoo because of this price increase. And I encourage that when you actually have that memo written, that you have others read it to give you their impression on it because you want it to come across positive and succinct and also convincing as to why you're doing what you're doing. Which brings to timing. You want to improve, you know, choose an appropriate time, obviously, to implement the increase. What you don't want to do more is do it at a time that's bad. Now, I talked briefly about this a minute ago, but you want to consider factors like, let's say, the economic environment or trends or when your members renew. So for example, if your members are annual, then you gotta give enough notice on the front end before their annual renewal about the price increase. Or let's say price increase strategically could be right after maybe you've had a retreat or something that really proved like an amazing experience for them because they're gonna be on a high and it's gonna be like second nature and no thought at all about the price increase. And you could even consider a phased implementation. Sometimes some of you might be out there and you haven't done one in a while, and you could have a few members that are grossly under market in regards to what they're paying, and you're not gonna be able to actually bump them up as much as you would like to. So you might consider gradual adjustments. We have definitely done that in the past where We inherited an actual group and some of those members were significantly under market by like paying a third of what everybody else did. So it was easy to go and have a conversation and say, we're going to grandfather you in, but we'd like to work with you on how we get you up to comparable of what everybody else is paying and worked with them on a plan on how to do that. Now, that's a very one-to-one scenario. So you're going to have those versus, versus the generic across-the-board scenarios. But you want to consider all of that. And that's an example of a phased implementation. I will tell you one of the best practices that I implemented years ago, because when I used to do this and I would do a price increase, I hated it. Hated writing the note. I hated trying to feel like I was justifying value. I hated thinking which members are going to call me out and want to have a one-on-one call. And I hated thinking I actually might lose a member because of it. And I never did, but it was the whole process I did not like until I read about this practice and implemented it. And it works beautifully. The best practice is in the membership form. I automatically put there's going to be a price increase so they know exactly what to expect. It's in their form, it's in writing, and I never have to talk about it again. Now the type of increase I do is a little unique. It's 1% quarterly. So 1% quarterly, they get an increase. It's super easy to administer. It's just a spreadsheet, and whoever is doing the billing for your members can easily know it's the quarter's up and it's a 1% increase, and then the next quarter it's a 1%. It is way better for you doing that because 1% throughout the year earns you more money than a percentage at the end of the year. So it's compounded. Got it? And 1% quarterly to a member intuitively seems insignificant, literally isn't so insignificant, but they're not going to call you because they argue about 1% quarterly because they kind of feel stupid to do that. And I will tell you, over the years I've only gotten a few calls. And when I've had those calls and talked through it as to why, et cetera, then they're fine. They kind of just have never seen it before. So I will also say is that it eliminates doing that letter and all of that angst every year. So consider baking into your member application a regular price increase. Now you always have the option not to do it. So let's just say it was COVID, right? The pandemic hit. You might not want to do a price increase, so you send out a note as a gift, get credit for it. There is no price increase. We're freezing pricing until further notice, blah, blah, blah, or for this next year, etc. That's very easy to do. That is a letter I wouldn't mind sending and one I would love to get if that's the right thing to do. So you can also analyze your actual member base about segmentation from the standpoint of, do you do something different such as the type of group? Maybe the price increases are different because you have different types of groups. Maybe you do one based on loyalty that you say once you've reached, you know, 5 years of being a member, there's no longer a price increase as a reward. Something like that, that can be very fun to communicate and incent retention and longevity with you. So give that thought. Member education. Up and beyond, educating your members about the changes and the value they will continue to receive is critical. So providing detailed information on how the price increase will contribute to maintaining and improving the quality of their member ship, their meetings, etc., would be all part of your communication. And there's other alternatives that you can do too, like introduce a new service and say, with this price increase, we're introducing this new assessment, or we're introducing this new product, etc., that provides this value to you. And as a result, this is part of the price increase that allows us to do this. You can also do something that helps offset the increase. Like, for example, I always offered members the ability if they wanted to do ACH EFT instead of credit card, that the price increase would be offset because that saved me money and that saved them money. And there we were. You know, you might give a discount for paying in advance, like annually or quarterly or something along that front. You just have to be sure that the value to you of getting that money is offset by the discount. The last point, monitor and adjust. Keep a close eye on your member reactions after you implement the price increase. Be willing to make adjustments based on feedback, what you sense is the case, any changing circumstance. Maintain a positive relationship with your members. The point is be prepared, have a plan, think through. You want to incorporate price increase that regularly happens that you communicate at the beginning of their membership in the membership offer form, and you can implement that at any point in time with all your members across the board. Or how often will you assess when you do a price increase? Only thing I can tell you is just don't not do one. In today's environment, you're leaving money on the table, but also you're leaving an impression with your members about what it is they're paying for and what they're getting in return. Successful price increases are often the result of a well-thought-out strategy, clear communication, and ultimately and always a focus on delivering ongoing value to your customers. That's today's episode, everyone. Price increases. Thought it was good to talk about that at the beginning of the year because this is a good time to take a look at how do you meet your own financial goals as well. Because price increases can help you do that as long as you know it's the right thing to do, not because you're avoiding doing it. Okay, listeners, it was great to spend time with you again, and I look forward to seeing you and hearing you next week. And until then, go make it happen.

Hey, moderators of groups, Thank you so much for listening to today's podcast. To get access to today's show notes and exclusive content and resources, visit TinaCornerStolz.com/podcast or LXcounsel.com, where you can also become part of an exclusive online community, attend our academy, or get free resources, templates, checklists, and more. And you can even contact me there as well. So if this episode resonated with you and you know someone who can also benefit from listening, please share with them by taking a screenshot and even posting on your social media. I also love reviews and appreciate hearing from each of you, those actually doing this wonderful work. Please tune in next week for another episode of Mastermind Mastery, and I'll close by sharing something my mentor did after every learning moment. He shared a shiny pebble from his pocket with anyone he passed knowledge to and asked them to forward that pebble, knowledge, on. So now I encourage you to go pass on a pebble, the takeaways you learned today, to either your existing groups or fellow peers. Now go make it a great one.