How to raise the price for friends?

Question

I am offering this service "B", nothing extraordinary, but apparently I'm quite good at it, and my close social environment knows this and regularly asks me for help. However, I am offering it for a very long time now and my spendings have risen, so that the "friendly discounts" I once granted have become too much of a compromise.

For some reason, the market has evolved in a way such that some of my long time customers came to completely depend on me, but I really cannot offer "B" for the same price anymore.

How do I raise the price without it looking like I'm exploiting my/their position?

Answer 1

Simple, explain that it is costing you more in { time | resources | parts | tools } to continue operating the way you have been. Inflation happens, period.

What I did for my pricing model is that my F&F rate (Friends and Family) is always $20/hr less than what I charge regular clients.

Option two if you do not feel like raising your prices is offer to put them in the queue for your work, but it only comes after the regular paying customers get their work completed.

If your friends do not like one of these two choices that both a) respect your time, and b) respect your income, then I would not consider them friends, and ask them to take their business elsewhere. You don't need negativity in your life with people not willing to pay you what you're worth.

Answer 2

You've got it backwards. The market hasn't evolved. These people are coming to you because you are cheap -- maybe you're actually undercutting what you could be actually making because you're too afraid to speak up.

If you need to raise prices, RAISE PRICES. But you must change your mindset. Some of your acquaintances will have a problem with it. DON'T apologize -- let them go elsewhere, and maybe they'll come back. DON'T try to control them by lowering your prices again, because you're teaching them that you can be manipulated by a little whining. You want to position yourself as someone who does quality work, and not just CHEAP work.

Answer 3

Most people I deal with in this situation understand that they get the "friends and family" rate. Whatever that rate may be. And they also understand that the rate will and does change based upon their request and my current rates.

What I generally do is:

JobPrice = (cost + (rate- 20%)) + understanding that priority is low (to be done after other clients' work is complete or during downtime while waiting on proofs, etc.).

If they want top priority service, they pay my full rates. And I always provide pricing before any work is begun. That way if they think the price is too high, they can tell me not to bother.

With this basic structure, there's no need for me to keep track of any actual dollar figures I charge "friends and family". I merely run my current rate, whatever it is, through the formula.

With all this being said... true friends and family get free services from me. Chances are 99% of what is needed are not major projects and are often simple 1 hour (or less) projects for me. And because... well... they are important people to me and once you start introducing money, you start chipping away at those relationships. Just watch a few episodes of The People's Court to see relatives fighting over money. There's no need for me to charge anything for most of the stuff my family needs. I only charge when a business associated with a relative/friend wants my business services. I'd honestly rather turn down work for family than get into money squabbles with them.

Answer 4

Explain it like it is: Your doing favors has unexpectedly turned into an actual business, meaning the pricing must change.

When I was hit by a similar problem, I gave current clients the choice of either being 'converted' to an actual, real client (no friends and family pricing or prioritization) or I negotiated and performed an exit, which they could live with and enabled them to take their business elsewhere.

Initially, I attempted to deliver lower pricing in exchange for being able to queue their requests - but this did not work out, due to client dissatisfaction with the longer delivery times and my displeasure at being longer at delivering inferior work for lower pay.