How to Raise Freelance Rates Without Scaring Your Clients Away
Every company needs to raise their rates from time to time to make a profit and stay in business. When a large corporation with a vast assortment of goods or services makes this kind of change, it’s typically less noticeable. But when a freelancer begins raising their rates for their services and expertise, it can result in losing clients due to strict market competition.
Inflation and pricing changes follow us everywhere, every day. It does take time, but eventually we all get used to it. If you need to raise your own rates or pricing, you don’t need to feel sorry or hesitant for doing so. Excellent work, expertise, and loyalty are all worth it.
1. Make Your Rate Change Less Sharp
The market changes every day and understanding that and adapting quickly is important. It’s a tough competition for the attention of clients and that requires adjustment and flexibility.
Compare yourself to your competitors
Keeping up with the average market price of a certain service is essential for a successful business. When you don’t revise your rates for a long time, you might find that your prices are much lower than the prices of your competitors. This might be the very reason why your clients use your service, but that’s not the way to grow as a successful freelancer or level up your own business. Looking at other businesses that provide similar services is one way to ensure your pricing is fair or to see if you have room to price up.
Work with Your Client’s Budgets
Even if you need to double your rates, you can’t do it in one day. Imagine one of your loyal clients finding out that their budget isn’t enough anymore. One way to raise your rates with them would be to raise them little by little.
You can do this over the course of a few months, raising your rate after 6 months with your client. You can also calculate the desired hourly rate and work out the difference between your current rate and the desired one and divide the difference by the number of months you need this transition to take. You'll get the number to which you should raise your rate each month. This takes more intention and organization.
Giving your clients enough time to consider your new rates is essential, so make sure to notify everyone in your clients preemptively.
2. Articulate Why
Let’s say, you are a photographer. As a photographer, any updated equipment you buy will add to your overall costs, as your purchase was made to improve the quality of your photos. Few, if any, would rationalize this explanation in a negative manner.
Or maybe you completed additional training to improve your professional skills, or your business costs have grown since you began. A large reason why freelancers might raise their rates is simply because of growing experience, additional client base, or maybe change or addition of services provided. Many clients are willing to pay for high-quality service, so provide them with a solid basis that your service is worth the money.
Be respectful but strict
Offer your existing clients solid reasons for your new rates without sounding guilty for doing so. As long as your rates are reasonable, you have nothing to apologize for. Be strict with the date of rate change that you have set for yourself so that some of your clients won't take advantage of your loyalty.
It's better to use the same way of communication to announce changes as you used earlier. So if you get used to communicate to them via emails, you should send an email to each client. Discuss the following:
The date of the rate rise. For example, the next month or the next milestone of the project.
Providing the reason, such as new equipment, expertise, etc.
Their opinion on the rate change. Whether it fits their budget and whether they will continue cooperating with you.
The amount of time you need to finish the work on their project if they do not agree with your new rates.
A possibility to delay the rate change for the client.
Setting the deadline for a rate change.
3. Offer Discounts to Loyal Clients
A lot of freelancers have a few clients who stick with them for a long time. Loyal clients are the best: you’ve worked with them previously, you know their team, you trust they’ll settle invoices on time, and they can promote your service to their friends and colleagues. It’s good to foster that relationship, so when you raise your rates, consider offering a discount or a longer lead time before you raise your rates.
Tasha Sender, client manager of EssayTigers, says, “Offering discounts is always a nice and caring touch. It’s not only an alternative form of saying ‘thank you,’ but also the best way to make loyal clients stay after implementing the changes you wanted to make.”
Send emails with discount codes to your existing clients, or offer them a special deal. This will show them how much you appreciate them, and how much you want to maintain a strong relationship.
Don’t Feel Guilty
Don’t be afraid and don’t feel guilty if you need to raise your rates. It’s a natural process that must happen periodically. Just make sure to notify your clients beforehand to avoid misunderstanding and you will have nothing to worry about.
Guest Blogger
Stacey Wonder is a content creator and a freelance writer who works for EssayTigers — the writing service. She is fond of blogging, self-development, and inspiration, which she gets from nature and from working with talented people. She also loves to compile tips, and life hacks into compelling posts.