Tips for Raising Prices of Your Services

Tips for Raising Prices of Your Services:

price-increase-tips

When you’ve gone through all the trouble it takes to set your rate of pay, it seems exhausting to talk about changing that number. Realistically, though, you are going to gain experience over the years, and hopefully demand for your services will also grow. When that happens, you might need to raise your rates.

As I mentioned in the previous chapter, you need to find ways to earn more over the length of your career. The easiest way, of course, is to just get better at doing the things you do, so that your flat fee services use up less and less time on your schedule. That frees up more time for more projects. This is the natural path to a pay raise.

You might also simply raise your flat fee rates, though, and that’s completely acceptable. The challenge, though, is that it’s a very visible way to get a raise. The client sees that increase on their invoice, and it might cause them to speak up, or even worse, remain unhappily silent.

All that said, here are some things to keep in mind when you reach the point where you do need to charge more.

Mid-Project Raises:
One thing you can’t do is blindside a client with the new rate on an invoice. A project should always begin with an agreement regarding cost, and if you decide in the middle of a project to change your rates, that client might be upset.

I realize this sounds impossible to do, but mistakes happen. If you use invoicing software, there’s probably a default hourly rate. If you change that, even after deep consideration and thoughtfulness, it will effect all future invoices. It’s easy in those moments to forget that you might have incomplete projects, and when you generate those final invoices for them, the system might use the new rate. Watch for that.

Some projects go up in price from the original quote due to “feature creep”, meaning that the list of things you need to do for the client has grown since beginning it. This usually happens innocently because the client gets excited about the new potential for their project, and they start requesting additional items.

That’s when you need to step back and re-evaluate the scope of the project, and then clearly communicate to them how the new expectations have outgrown the original request. You’ll need to tell them, professionally and clearly, how much those additional items would cost in an hourly rate, and then offer them a cheaper flat fee to tack onto the project. They’ll be getting a “deal”, and will be more likely to agree to the increase. Alternatively, it might incentivize them to stop adding feature requests, once they know that those new ideas come with a new price tag. Your time isn’t limitless, and neither is their budget, so it’s important to be upfront and clear about this as soon as you see it happening.

Raising Prices on Old Clients:
Sometimes your price increases happen mid-relationship, rather than mid-project. In other words, you have a client on your list that you’ve been working with off and on for the past few years (having clients like that is a good sign of health for your freelance business, by the way), and your normal rate of pay has increased since you partnered up with them. Navigating that change is tricky, and can ruin the business relationship if you don’t handle it well. One thing I do is give the client as much notice of the change as possible. I like to tie pay rate increases to the start of new calendar years, so I might email the client in the summer and let them know what’s going to happen. The message might look something like this: “I just wanted to give you a heads-up that I’ve raised my normal hourly rate by 5%. For new clients, that rate is effective immediately. You and I go a long way back, though, and I consider you more of a partner than a client. As a token of my appreciation, I won’t be raising your rate until January, giving you a few months to plan ahead. Thanks, as always, for your patronage and partnership!”

Your message might vary, but the key here is to give them a big heads- up, and make it clear that you greatly appreciate their business. Clients that stick with us for years are special, and you need to treat them that way.

I also think it’s worth considering maintaining a cheaper rate of pay for these loyal clients, in comparison to brand new clients. For example, your rate for new clients might be jumping from $30/hour to $50/hour, but the client who is still paying $25/hour might only get bumped to $35/ hour. Tell them that, and make it clear that you always hope to reward their loyalty with a slightly lower rate.

This teaches them the value of what you are offering them: amazing services at a rate that’s far below what others are paying. Even if the rates are going up, they can see how the new rate is still less than you are charging other, newer clients.

Raise your rates with confidence, but don’t forget to reward loyalty.

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