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LAWBIZ COACHES CORNER: All in favor of a rate increase, raise your hand

Ed Poll is a speaker, author and board-approved coach to the legal profession. He can be contacted at edpoll@lawbiz.com. Also visit his interactive community for lawyers at www.LawBizForum.com.

Any customer who wants a rate increase, please raise your hand.

I don’t see any hands. Anyone? No one?

As you might have guessed, that result is predictable. No customer is going to jump and down and shout, “Please give me a rate increase. I really, really want to pay more!”

On the other hand, if you are the business owner, a rate increase is undoubtedly desirable.

So, how do you as an attorney business owner get what you want and keep your clients happy at the same time?

The answer is in the method.

  1. Netflix is a good example of how to do things right. Recently, the Internet-based media company raised its monthly price for new customers to $9, a $1 increase over its previous price.
  2. Its rate for existing customers will remain the same for another two years. Netflix had not imposed a rate increase on customers in almost three years. Netflix plans to use the additional fees to offer a wider selection of original programming.
  3. Lawyers should take note of what Netflix did right.
  4. It began by raising its rates for new customers only. New customers are less likely than existing customers to object to an increase.
  5. Netflix worked in an “adjustment period” of two years to allow existing customers to get used to the idea of a rate increase. Thus, Netflix is more likely to maintain the goodwill of its customer base.
  6. Netflix’s price increase is not excessive. A one-dollar increase will probably seem reasonable to most new and existing customers.
  7. Netflix had not raised its rates for quite a long time. Because Netflix has kept its rates constant for an extended period, customers are more likely to quietly accept the increase.
  8. Netflix will be offering more programming. By giving customers more value, Netflix is “justifying” its rate increase in the minds of the customers.

Law firms would be smart to follow suit.

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