It’s hard enough asking your boss for a raise. But, it’s a whole new ballgame when you’re the boss and you decide to increase your rates. First, it can be hard to tell if you are really justified in charging more for your services (you don’t have someone like a boss to “approve” the raise). You also don’t want to come across as greedy to your clients. And, it can be really challenging and uncomfortable to figure out how to tell your clients you’ve essentially given yourself a raise.
Well, it turns out, these two scenarios are more similar than they may seem. In both cases, you have to be able to articulate your value. You need to describe the benefits you provide your clients and why your services deserve a higher rate. Anyone, whether it’s a boss or a client, will be happy to pay more if he or she believes in your value.
If you feel uncomfortable “tooting your own horn,” think about all the benefits that come with increasing your prices (besides the bigger paycheck, duh). A rate increase makes you appear more valuable (higher price = higher perceived value) and it allows you to work with fewer clients, but give them more attention. Plus, it attracts the kind of clients you do want – a penny-pincher client will not recognize your worth, and they are often the most time-consuming clients. With higher paying clients, you know that they respect your time and skills, and you’ll be more motivated to do great work for them.
The Different Ways to Raise Your Prices
Once you’ve made the decision to increase your rates, you’ll have to decide how you’ll go about it. Will it only apply to new clients? Are you changing the pricing model for all clients? Or only for some clients?
Here are your options:
- Only change pricing for new clients: You don’t have to raise prices on current clients. You could only apply your higher rate for new clients, or wait until current clients complete a contract and bring up the rate raise before beginning a new contract.
- Raise prices across the board: If you have never increased your prices or you feel like you’ve been significantly undercharging, then you may need to raise your rates for every client, current and future. If you take this approach, you need to be okay with losing a few clients. Some clients may happily pay you the new rate, but others may feel blindsided and won’t continue working with you at the new price.
- Work with each client individually: Raising your rates doesn’t have to be so black and white. You can do something differently with each client. Go through your client list and identify which clients you do not want to lose, which clients you are undercharging, and which clients you are okay losing. Then, adjust your prices accordingly.
Script: How to Tell Your Clients
Before you tell your clients about the change, make sure you’ve done your homework. You need to feel confident in your new rate, and understand the value you bring your clients. You need to believe in yourself and in your new pricing structure before you can ask your clients to do the same!
Once you’re ready, steal this script to notify your clients of the change:
I’m excited to share some changes I am making to my services that are going to help you generate more leads from your content marketing strategy [insert the desired outcome of your client. Focus on the benefit – what’s in it for your client?]
Since we first started working together, I’ve been restructuring my business so it’s even better for you. I’m becoming more selective with the clients I’m working with, so I can devote more attention to you and start working on some new campaigns.
I’m also making some changes around my pricing structure. My rates will increase from X to Y, effective Z. If this doesn’t work for you, please let me know and I’d be happy to recommend another agency that may better fit your pricing needs.
If this does work for you, here is my plan for the next 30 days and the goals I’d like to accomplish: [Spell out exactly what you plan to do for your client in the next 30, 60, or 90 days. This is a subtle way of justifying your new prices – you’re showing your client the additional value you will be able to provide].
If you have any questions, please let me know. I’d love to continue working with you.
Increasing your rates doesn’t need to be a nerve-wracking, scary conversation. It is just a simple fact of business. Your agency will not grow if your prices never change.
Yes, you may lose clients. But, that’s not the end of the world. In fact, it may be the best thing that ever happened to you. If you reduce your workload, spend less time in meetings, write fewer emails, only work with clients you enjoy, AND make more money, there is literally nothing left to complain about. So, what are you waiting for? Give yourself a raise! You deserve it.
Conclusion and Next Steps
Have you raised your prices and fees? How did it go? Leave your feedback for others in the comment box below.
Photo Credit: @kimwouters