If you spend as much time as I do reading newsletters, web content and such, you’ve seen the advice to raise your rates right now!
Some “experts” even suggest you double your rates. RIGHT NOW!
Their confidence in their advice is breathtaking, considering that they don’t know the identities—and certainly not the competency levels—of their readers.
They seem to equate self-esteem with pay rates.
And if I may be crass for a moment, they seem to equate our signing up for their expensive coaching programs with achieving the level of self-esteem to which we aspire.
Note that they advise us to raise our rates NOW and also sign up for further coaching and instruction.
Huh? If you’ve already raised your rates, why do you need more help? While advice on implementation may be useful, you’d better already know what you’re going to tell your clients if you raise your prices TODAY.
I’d like to make a modest suggestion that rate increases be based on what the marketplace is telling you.
When to raise your rates
Here are some ways the market speaks to you:
You have so much work that you toil exhausting hours at full speed. Sure, raise your rates to equalize supply and demand. Charge more, work fewer hours. The market has spoken.
You can handle more work and you have a strategic marketing program in place that consistently brings new clients.
You work a substantial schedule but you are not pulling in enough income to pay your bills and pay yourself fairly. Be thoughtful here. Is your work worth more than your current rate?
You feel a disconnect between your fees and the excellence of your services. This calls for sensitivity. If you have a gut feel you are undercharging, you probably are. But just because someone else challenges your self-esteem doesn’t mean you are undercharging.
You change your market. For instance, larger companies pay better than smaller companies. In part this is because they require more paperwork, are more bureaucratic, and pay slower—30 days or even 60 days out. However, often they simply pay better. That’s how it is.
Your services change and/or improve. You are more experienced and accomplish more in an hour. You have beefed up your portfolio with impressive samples. You have developed new skills. You provide tighter turnaround.
What if you have no business yet? I suggest focusing on bringing in a few clients at your current rate rather than raising your rate.
Another big decision
If you have decided to raise your fees, now you face another challenging decision: Raise fees for only new clients or for current clients as well?
“Fairness” is not a consideration here. You do not have to charge everyone the same rate so long as you don’t post your rates on your website.
It goes back to the original question: Why are you raising your rates?
If you have too much work, you can raise prices across the board and confidently risk the loss of current clients.
If you are comfortable with your current relationship with a client, you may wish to leave their rate where it is, perhaps temporarily or even long term. You may wish to schedule the price increase for a few months out or even the first of the year. (If it’s quite awhile out, you can postpone informing the client of the increase until you see how new prospects respond and how your workload changes.)
In determining freelance and consulting rates, a little introspection provides much more effective guidance than the exhortations of strangers.
Originally posted 5-18-14