Do you feel you’re earning less than you deserve? If so, there’s one main reason – and it’s nothing to do with your talent. Quite often, it’s fear – of charging too much, that clients will go somewhere else, or that they’ll become annoyed if you ask for more.
Sometimes, the thought of increasing your rates does feel difficult. We’ve all been there, with at least one client who didn’t react well to being told about a rate increase. However, it doesn’t have to be that way! Approached correctly, you should be able to earn what you’re worth, and ensure that your clients are happy with the situation to boot.
In this post, we’ll have a look at six key tactics you should use when you want to increase your rates – along with one vital preliminary step. Let’s get started!
Do Your Analysis First
When you initially discuss raising your rates with a client, you need to do much more than say something feeble such as, “I just thought I’d put my rates up”.
You need to consider very carefully why you want to raise your rates, and just as importantly, by how much. Get these arguments clear in your own mind, so you can confidently explain them to your clients.
Critically, you must know whether you are earning less than you need to survive. Here’s a great blog post that looks in detail at how to work out what you need to earn. Once you have this data, you can calculate the gap between what you’re getting and what you need.
Now let’s take a look at the six tactics you can use to increase your rates, without frustrating your clients.
1. Use Logic
Once you have a minimum figure in mind that you need to earn, you have to figure out what you’re worth. Providing your clients with good, logical reasons why you’re worth more than you’re currently charging is vital if you’re going to get their buy-in.
Ask yourself what’s changed about your service since you last raised your rates (if you ever have). For a start, you will undoubtedly have gained additional expertise, you may have attended courses that added to your skills, or you could be offering additional services.
Whatever you’ve gained, you’ll need to explain how this adds value for your client – you don’t even have to mention money! Are you adding quality, or saving them time or hassle? If your client understands that you’re giving them more than before, they’ll be much easier to persuade.
2. Provide Facts
If you look at a website that lists average rates for your sector, you may find you’re significantly undercharging. Providing clients with a link to a reputable website that lists the going rate for the job can be powerfully persuasive.
For example, this site focuses on the US freelance writing market. For an overall view of the rate for any job, the Bureau of Labor Statistics provides ballpark estimates of salaries for every profession.
While this data only looks at employee salaries, it will give you a solid starting point – and remember, salaries are usually significantly lower than freelance rates, due to the nature of freelance work. If you set out the facts, your clients should be able to see the good deal they’re getting.
3. Be Brief
While it’s important to get the facts across, it’s also important not to over-explain. If you do, you’ll begin to sound as if you’re protesting too much. To a client, that could look like you’re unsure about what you’re proposing.
For example, think about how your power company tells you that its prices are going up – it’s pretty to the point, isn’t it? They may provide statistics to show you’re getting a great deal, but big utilities never spend a lot of time trying to talk you round. While you need to be more personal and tactful than a power giant, you shouldn’t offer pages of explanation.
Whether you’re telling your client in person or in a message, when you’ve broken the news that your rates are going up (and by how much), briefly explain why. Include the facts and links discussed above, stress your added value, but make sure you do this in no more than a couple of short paragraphs.
If you’re going to have a conversation, write down the salient messages to deliver, and have a checklist of supporting data to hand in case your client asks questions.
4. Be Confident
One thing you should try to avoid is backtracking once you’ve made the decision to increase your rates. If you’ve gone through the process of identifying your costs and your value – and you believe that you need and deserve a rate rise – it’s something you should present as fact.
Freelancers are often so worried about client reactions that their rate rise messages are incredibly apologetic. Yet these same clients undoubtedly raise their rates when they need to without giving it a second thought. If they believe they deserve it, you do too.
Simply put, strike out the apologetic language and opt for neutral, polite, and firm messages.
5. Compromise With Valued Clients
With the above in mind, there may be cases where a client says they can’t afford the rate you’d like to achieve. At this point, it may be time to consider your relationship with them.
It’s important to consider the non-monetary value that a particular client brings. Is this a regular client who pays promptly and is easy to deal with? Do they have a good name that you can use to leverage other work?
If so, it might be worth negotiating. This doesn’t necessarily mean freezing your rates: after all, from the calculations you made, you know you need to. However, as a starting point, it’s worth asking your client if they can meet you at some figure in between.
6. Work Smarter
If you think clients will reject a rate rise, it’s time to think of alternative ways to work that will achieve the same ultimate effect.
Sometimes, the best way to get paid more for your services is to offer them in a different way. For example, you could offer a premium-tiered service alongside a basic package, with the latter being a cut-down version of what you currently do at your original rate, and the former with a few extra perks at a higher rate.
The way to sell your premium service is as a value-adding option for your client – for example, give away a guide relating to common aspects of your client base’s businesses, or offer small related extras that don’t take up much of your time, but help them in some way.
Raising your rates is always a challenge, especially if you’re gripped by the fear of losing an existing client. Sometimes, the thought of a dwindling client base is enough to make you put the calculator back in the drawer, never to be opened again.
However, increasing your rates need not be a painful process. If you approach it strategically by convincing clients of your value to them – and that you’re worth the extra – you’ll be able to tackle a prickly subject confidently. Let’s recap:
- Work out what you should be earning.
- Provide a logical explanation.
- Give your clients the facts.
- Don’t over-explain your decision.
- Be confident.
- Be prepared to bargain (if the client is worth it).
- All else failing, try different approaches.
Image credit: terimakasih0.