I read an article today about how to raise rates and keep your clients. In one suggestion, writers were supposed to sit clients down, explain that the writer's demand was so great that rates had to go up, but that the writer was letting this client know because "You're a favorite client."
It felt contrived.
I don't know how you guys raise your rates, but I prefer not to announce it (unless it's a low-paying client who's either going to cough up more or disappear with my blessing). I just increase the bill. Current clients usually get a small percentage break if they're sending me regular projects. Maybe that's the chicken-shit way of doing things, but since I quote per-project on most things, I don't see too much of an issue.
With new clients, they hear the new rate.
How do you handle raising your rates without the uncomfortable conversation? Or do you just dive in and let them deal with it?
Wow, that does sound really contrived and uncomfortably “salesy.” I have told a couple clients they’re my favorites, but only because they really are! (They just don’t have to know they tied for 1st place 🙂
I just raised my rates for the new year, and I prefer to just ask.
For one client, they coincidentally asked me to do a bit more work on a regular project, so I asked for a slightly higher rate to go with the increased responsibility, and they agreed. My hourly rate still worked out to my new target goal, so it was win-win!
Another client I knew was on a really tight budget. I brought up the question of increased rates, but, as I expected, she said she couldn’t afford it. However I really love the work & she’s a wonderful client, so I decided to continue at my old rates for now. The hourly rate is much lower than my goal, but there are several other payoffs, so it’s still a good fit for now.
Like you, Lori, for new clients, I just quote higher rates. Plus I list some rates on my website, so I tweaked those a bit as well.
I’m curious what you mean by just increasing the bill. How exactly does that work? Do they give you assignments and you just send them an invoice at your new rates? Do you typically invoice upfront? Has anyone ever tried to argue the new pricing? Sorry for all the questions, just hoping for more details from someone with more experience
I agree Lori. There’s something condescending about that approach — telling an existing client that “rates have to go up.” Just as they’re not your boss, you aren’t theirs. You don’t get to bark orders.
That said, there are times when it makes perfect sense to discuss increases with past clients. In your case it does seem unnecessary because it sounds like you’re quoting for each project separately. All a client needs to know is how much they would have to pay and what the fee covers. The exceptions would be things like hourly billing, per-piece rates where clients are used to a set dollar amount, and ongoing contracts where you charge a set weekly or monthly fee. In that last case, it’s important to remember that you can’t simply raise rates whenever you want to. You would have to abide by the contract terms for whatever period your contract covers (why it’s so important to work in re-negotiation periods and limit ongoing contracts to every few months to a year depending on your comfort level).
Like KeriLynn I change my rates on my website and those become the rates I charge new clients. Then I handle old clients on a case-by-case basis depending on my hourly target. If the old rates have me at or above my hourly target, I leave them where they are for the time being. If they won’t let me meet my new target, then I give the client anywhere from a few weeks to a few months notice that my per-piece rates are increasing so we have time to negotiate if necessary. Sometimes they simply pay the new rates when the time comes. Sometimes we renegotiate the scope so they can keep their old rates and I can cut back how much time I have to sink into the projects, so I still meet my hourly targets. But in either case, it would never come down to something like “you’re not paying me enough; I’m worth more than you pay me; etc.”
In the past, I’ve announced to existing clients that my rates are going up, usually a couple of months before, then I just bill at the new rate. New ones just get quoted the new rate and I change the prices on my site as needed.
Keri, I increase the bill when I quote. Usually, I’m quoting per project. If they think the price is fair, then there’s no issue. Few of my clients are ones I work with regularly. They would be told about an increase as I take on a new project. For client I work with infrequently, I just don’t bring it up unless they do.
Jenn, agreed. With the ongoing contracted clients, I don’t raise rates without having a discussion with them. And you’re right — most of my work is priced per project. That’s why it’s never been much of an issue to raise rates. And the raises have been in small increments. It’s not like I’m making say $100/hr. today and $200/hr. tomorrow.
Sharon, I like your approach much better.
Ah, thanks for the info, Lori! Makes sense
Thanks, ladies. It works pretty well. Occasionally I get pushback, and then it’s a case of deciding how much I want to work with the client.