Tips To Raise Your Freelance Rates
Maybe you started out with low rates to get experience or win clients. Maybe you’ve been working with the same clients at the same rates for years and believe an increase is overdue. Whatever your reason for wanting to raise your freelance rates, there’s no need to be apologetic. Rising prices are a fact of life.
But you need to be careful about how steep your increase is and how you inform your clients of the hike.
Know the Market
Yes, your prices should reflect the quality of the service you provide, but those rates still need to be competitive with the market.
Before you raise your rates, do some research to find out what other people are charging for the same type of work to ensure your new prices make sense.
You don’t need to have the lowest rates to be competitive. But you do need to make sure that you’re not about to price yourself out of the market. And you also want to make sure you aren’t lowballing yourself.
Offer Advance Notice
If there’s one occasion when people are sure to hate surprises, it’s when they come on a bill.
Don’t raise your freelance rates without forewarning your clients.
An unannounced rate hike can make your freelance operation seem shady. And, it’s likely to come across as unprofessional and inconsiderate.
Always give clients advance notice that you’ll be raising your freelance rates so they have time to adjust their budgets.
Provide an Explanation
Soften the blow by explaining why the price increase is coming.
There are many possible reasons for raising your freelance rates, and more than one may apply with a given client. The explanation you provide doesn’t have to expose your finances or provide extensive detail.
But say something more than, oh by the way prices are going up.
For example, if you’ve been working with a client for a while, and your current rates are lagging the market rates, you could say something like:
Periodically, I review my contracts to determine if there’s a need to update any terms and rates. After the most recent review, I’ve made the following rate adjustments to ensure that I can continue to provide high-quality service tailored to your need.
Whatever your reasons, clients are more likely to be understanding if they feel that you recognize the importance of explaining the changes to them.
Don’t Raise Rates Too Sharply
If client retention is important to you, it’s best to raise your rates in small increments if your services are drastically underpriced.
Many people prefer to stick with a freelancer that they have a history with even when facing rate hikes. But sticker shock is real, and a sudden 30% wallop, for example, is more likely to cost you clients than three increases of 10% spread over time.
Remember, you don’t have to raise your freelance rates for all clients by the same amount at the same time.
So, you may want to announce steeper hikes for newer clients who aren’t used to paying the old prices or for large corporate clients who can easily absorb the increase.
Meanwhile, you make want to impose smaller increases on long-running clients or small businesses that are more sensitive to cost fluctuations.
Make Price Increases A Habit
You can prime your clients for increases by raising your rates periodically, preferably at the same frequency, which could be annually, biannually or whatever you feel is best based on your relationship with a given client.
Regular, periodic price increases eliminate the need for sudden, larger price rises. And annual price increases, for example, are no different than annual raises for staff, which isn’t a foreign concept to anybody.
For best results, it’s good to include in your contracts that rates are subject to change periodically so your clients know that’s how you operate.
Furthermore, you can sell your clients on the idea of periodic price increases by telling them they’re getting a “low introductory rate” in the beginning.
People love a deal and they love pushing off the full cost of things.
Offer Loyal Clients A Discount
You may be raising your freelance rates across the board. Say you change the publicly posted prices of your content writing and photography packages on your website.
If you have loyal clients, especially clients that provide you with a lot of work, offer them a discount.
By doing that, you’re softening the impact of the increase, showing your appreciation for their business, and increasing the chances of being repaid with some degree of loyalty. Especially, when you’ve publicized your new rates and the client can confirm that they’re saving.
Raising your freelance rates can be a scary, especially when you’re new to the game. But it is something that all freelancers have to do from time to time.
You have to charge reasonable prices for the services you provide, and those prices must reflect your personal needs and costs to run your business.
Sensible pricing is key in helping to prevent burnout.
One of the main reasons freelancers get burned out is that they’re overworked, underpaid, and too scared to do anything about it.