Nobody likes paying more money for a service than they’re used to. That’s why getting in touch with clients to tell them about a rate increase can feel like such an unpleasant task. It can take an age to plan the perfect phone call that puts a positive spin on price hikes, causing you a huge amount of undue stress in the process. You know you deserve to be earning more for your great work, but you don’t want to send your clients scuttling away to a cheaper competitor, so it’s tricky territory.
That’s why we’ve put together this list of rate-raising tips for freelancers and contractors, including all the crucial do’s and don’ts.
Do: Tell them verbally, confidently and politely
Communicating price boosts via e-mail is asking for trouble. Instead, arrange a call or meeting with your client, walk in with a smile and a confident approach, and tell them in a straight, polite way that you’re going to be raising prices in the future.
They’ll likely want some explanation as to why, so be ready to give them an answer. But whatever you do…
Don’t: Blame it on the economy or inflation
Some clients will become impatient if you tell them that inflation is to blame for the increased costs. They might be struggling too, after all, and this is the last kind of excuse they want to hear.
Instead, explain you’re building a bigger, better service that will cost a bit more, but will be worth every additional penny in the long run. In order to get them on board…
Do: Show them you’re worth it
Bring a detailed plan along to the meeting and illustrate to your client what their extra fees will be going towards. Reflect on the high-quality work you’ve done for them in the past, and point out how these raised rates will allow you to do so much more for them.
However…
Don’t: Spring them a surprise
Abruptly telling your client that rates will rise tomorrow won’t end well. Avoid implementing your higher prices quickly and suddenly, and instead offer your clients plenty of notice beforehand about the change in costs.
This way, your client will have time to digest the news and prepare accordingly. They’ll respect you for giving them an adjustment window too. And when you get down to discussing the money…
Do: Remain flexible with payment options
Stubbornness burns bridges. If you raise rates and make it abundantly clear you’re not willing to budge, it will leave a sour taste that gives a client more inclination to leave than stick with you.
Instead of demanding higher fees up front, explain that you’re open to discussion regarding payment plans over an hourly, weekly, or monthly period, and consider offering price tiers so clients have the choice of purchasing a package’s worth of work.
The toughest part of the freelance/contracting lifestyle is managing your income and expenditure. In an employed position, this is usually handled for you, and it’s only when you decide to go it alone that you realise how much is actually involved. That’s where we come in. Bright Ideas Accountancy have been helping self-employed workers keep their accounts in check for years. Give us a call on 0161 451 3940 to find out what we can do for you.
