When's the last time you updated your pricing model to match your payroll reality?
For example, our direct payroll (before tax) is 38% while our indirect payroll is 10%.
As of January 2, we increased rates for all recurring clients by 4% to offload the indirect percentage.
Going forward, we increased all first-time services by 5%.
Thoughts?
Great question and it is super important to run a healthy business. We do a price increase every quarter. We just monitor the customers that needs to be raised. This way we don't necessairly lose too many customers at once. For me the price increase was always about an 80%/20% rule. This way it is more close to 95%/5% meaning that we only maybe lose about 5%. And I know this sounds scary but in reality the customers you were able to raise for, you already make up the lost money and effort.
I do love this! Out of 400 recurring clients, we only lost 2 due to the 4% increase. I’m wondering if we raise again mid year or if that’s considered overkill. We remained modest but the response was almost too modest 😭😂
