What to Consider When Raising Your Wedding Business Pricing
We are in the midst of one of the busiest years in the recent history of weddings and smack dab in the middle of a huge inflation period in the US, which is leading many wedding educators to warn that vendors should be raising their prices. Now, while that certainly seems like the prudent thing to do, there are a few factors you will want to consider before taking that leap. Want to know the steps we take to determine raising our prices? I am spilling the beans below…
When it comes to pricing, many wedding pros don’t know where to start. They look to what all of their peers are doing and decide to price their services accordingly, but that strategy is not ideal. You want to make sure that you are pricing for profitability, your market and for your own business needs - not someone else’s!
Now that inflation is hitting the US and commodities are getting more expensive globally, there is a lot of talk about raising prices and the wedding industry is no exception. But, basing your pricing on the currently fluctuating cost of inflation isn’t a strategy and in fact, you would need to be continually changing your prices if you based your rates on the financial markets. Instead there are key factors that you can use to wisely make decisions about your rates and that will ensure you don’t feel left behind as other vendors may be raising their own.
The first thing to note is if you are in a portion of our industry that is directly affected by the market. Are you a florist or caterer? These two segments of the industry are already seeing the changing cost of good immediately affect their businesses and of course you will need to be quicker to respond with your pricing. If you operate in these areas you should have in place a pricing model that allows you to adjust the cost of food and flowers according to the commodities market and differently for each of your events. So, in fact you would not need to worry as much about raising your prices because you should be able to better accommodate fluctuating pricing quicker than most other wedding vendors.
However, if you have a business that is mostly service based like photographer, makeup artist, planner, DJ, officiant, etc - it is harder to determine when we should be adjusting our pricing and by how much.
The very best way to understand when it is time to adjust your pricing should come from data. And that data should be key metrics from your own business. I teach in our membership about the Business Dashboard I have, where I can see in real time month by month how our bookings are tracking along with our inquiries and profit. However, I also have this data for past years, so I can see the history of my own businesses ebb and flow and understand how things are shaping up for next year. This is key to understanding if you are in a position to raise your pricing or if you just feel like you should be raising your pricing because everyone else is.
Before raising my prices, I ask myself the following questions;
Are we currently on track for the bookings we want to have for next year to meet our goal?
Are we getting the amount of inquiries currently that we want to have?
Are we currently profitable with the pricing we have?
Are any of my costs going up next year that I need to take into consideration and begin planning for?
A huge determination is that if you are basing your pricing for next year on current inflation rates, that is not necessarily going to help you next year at all, it just may temporarily help you right now. There is a balance to find here and the best way to do it is based on your own business data and not someone else’s. It is always OK to learn from other industry experts advice, to see what your market is doing and to understand what your peers are pricing at - however, none of that is a good substitute for understanding your individual business needs and goals.
For instance, if you are not yet at the number of bookings you want to be at for next year, would it be more prudent to ensure that you are closer to that goal of bookings before choosing a big rate hike less than half way through the year? There is something to be said for realizing that you may lose bookings if you raise your pricing too steeply and while it may feel good in the short term, you might find that you enter into the new year wishing you had more bookings already in place and that you had hit your goal.
Perhaps you are ahead of schedule and are right where you want to be going into next year, with the number of bookings you have and a ton of inquiries. But you are worried that your pricing is long overdue to be adjusted and you are already seeing that costs are going to go up. And because of the high demand you currently have, this is a great time for you to raise your rates.
There is no right or wrong way to price or timing you need to adhere to, that is the great thing about having your own business. But, you want to make sure that you are not pricing yourself out of what your market will pay, that you are staying competitive and that you are profitable for your own needs. You don’t need to ensure that you are matching current inflation rates, or pricing the way some luxury vendors in your area are or even letting your clients determine what you should be charging. You need to ensure that your own goals are being met and that you are booking at the rate in which you know you need to in order to have a healthy business, not only now, but into next year too.
There are challenges in what we do in the wedding market because we often times book so far ahead of time, so we are charging for services that we won’t be doing until next year - or even longer! That is difficult to plan for, so it makes it even more imperative that you understand your numbers and have clear profit guidelines and booking goals that you can use to help you make big decisions.
So, while the cost of goods may be going up, think about where you are in your booking goals and maybe that means you do a modest price increase now and a bigger one later in the year or maybe you use your impending pricing increase as a way to get your couples to book you now. There are a lot of factors that go into pricing, so before you announce a huge price increase, make sure you know your data and you know exactly why that is going to work best for your biz.
What do you think? Do you know how to track your companies data? Are you making big price adjustments going into next year? I would love to hear from you! Drop me a DM at @morganmchilds or join us in the Elopement Wedding Pro Community where we are discussing this in depth and even have a private podcast episode about what to do about inflation.
xx MMC
PS Want to email me? Love to hear from you.