How to Make Exponentially More Money & Know When to Raise Your Rates

This episode explores the considerations independent adjusters must ponder when contemplating raising their rates. Listeners learn how market demand and workload should influence pricing decisions rather than arbitrary increases.

• Understanding the payment structures for independent adjusters 
• Key indicators suggesting a rate increase is appropriate 
• Recognizing the importance of demand in setting prices 
• Strategies for attracting more work without increasing rates 
• The advantages of diversifying service offerings for better income 
• Emphasizing a business owner mindset in pricing decisions

Transcript

Speaker 1: 0:16

Hey, pathfinders, welcome back to the Independent Industry Podcast. This is your host, chris Stanley. I was just having a conversation with a fellow Pathfinder, a graduate of our program, and he had a really good question. I figured I'd share the answer a little more in depth than maybe even I did with him, with you, as I had some time to think about it after our call. So his question was hey, I've been in this industry a certain amount of time let's pick a number, six months to a year or something like that and I'm wondering if I should raise my rates, start charging more. So this is a great question. This is one for veterans, this is one for rookies alike Basically, when to know how to raise your rates. And if you're not familiar with how IAs are paid, it comes in a few different ways. One fee schedules, which is more traditional with residential or property claims, where you make more money per claim if it's more damages. So the more damages, the more you get claimed, but it's a percentage of the claim you get paid. The other we get paid is per claim, just a flat rate plus mileage, and so that's more common in the auto claim world. And so that's what he was asking about was like hey, should I raise my base rate, my flat fee rate, that I get paid? And here's how I think about this.

Speaker 1: 1:31

In business, typically something costs more the more in demand it is. So the iPhone is really expensive. Why? Because they charge more for it, right, because people want it. If nobody wanted an iPhone, nobody would pay that money for it. But because people keep buying iPhones, they can charge more money for it than they can an Android phone or than the base rate phone from the gas station or whatever. You could buy a phone for $100 or you could buy one for $1,200 because it's in demand. What I would tell you is that if you are looking to raise your rates, if you're trying to consider if now is the right time, what I would say is are you so busy, are you so in demand that you need to raise your rates? And if you're not so busy, then that is not the right time to raise your rates. And if you're not so busy, then that is not the right time to raise your rates. So if you're really busy, that's the time to raise your rates, because the demand for you is too high to continue operating at the rate you're currently charging. You're too affordable at that point.

Speaker 1: 2:39

And for me in my career, what I tended to do was when I was not busy enough, I would lower my rates Crazy, I know I'm not in demand, so I need to become more in demand I would raise my rates. I'd spread my territory out, I'd volunteer to go places what we all do to get started. So when you're slow that typically is when you start to go man, I should raise my rates. I'm not making enough money. But what you really need to be thinking about doing is how do I get more work? Because that's what we're really after is we're after more income, not necessarily just higher rates. So if I can get more income by getting more volume, I'm all for that. And what I found was what would really change my world is more work or better work.

Speaker 1: 3:22

If you're making an extra $3, let's say, because you raise 5% on your fee, your base rate you get an extra $3 a file. You're doing 20 files a week. That's 60 extra dollars. That's cool, but that's not changing your world. $60, that's $240 a month. That's not what we're talking about. Most people what they're talking about is I need to make a few extra thousand dollars a month. How do we do that? How do we generate more demand for us is by being more valuable, being more affordable or by being willing to go places. People aren't. So adding things like heavy equipment, semi-truck and trailer Adding things like heavy equipment, semi-truck and trailer, rv, that kind of thing those pay $250 to $500 a piece. So if we can just get one of those a week, that's going to do more than what raising our rates are.

Speaker 1: 4:10

And sometimes when you raise your rates when you're slow, guess what? You'll stop getting work altogether. That's a new thing. On the supply and demand. Don't raise your rates if you're slow. Only raise it if you're super busy and can't take on more work and then start getting picky about who you work for at that point. And then if you need more income which is usually what is the case when someone says they want to raise their rates then think about how to get more companies on or different types of claims types that pay better, because that's what's going to move the needle more for you and your business.

Speaker 1: 4:46

You have to think like a business owner. You don't raise your rates when you're not getting enough customers. You've got to figure out how to go get more customers so then you can make more income. And then you need to figure out what other products you can offer, like heavy equipment, semi-truck, rv or even property inspections, so you can offer those to your customers and new customers and in turn get more work. That's my opinion. That's how I view pricing, whether it's an IA path for coaching products or courses or books or for IA services. It's supply and demand. If it's too in demand, you need to raise the price. If you're too busy, you need to raise your price. If you are too slow, you might need to lower your price or just simply go get more customers, because maybe the customers you have just aren't buying enough services at this point in time. Hope that helps. Keep walking your path and claiming your life.