March 18, 2014 at 3:43 pm #27082
Let’s say you haven’t been charging enough for your freelance writing services. You’re ready to raise your rates. But how do you spring a rate increase on your clients without driving all of them away?
You have a few options:
- You raise your rates — no apologies, no exceptions. You’re willing to walk away from any client who can’t accept your new rates. This is the ideal situation. The best position of power you can be in as an independent contractor is to be in a position to walk away. You should still approach the topic tactfully and politely, and emphasize that you’ve enjoyed working with them. You might be pleasantly surprised by how my clients stick around.
- You increase rates to your new target immediately for new clients but ease older clients into it. You can do this in two ways: give them a smaller increase now, letting them know when old client rates will match your new client rates, or you can simply give them advance notice of your larger rate change. If you expect to get referrals from these people for better gigs, don’t spring it on them at the last minute. Make sure they have a bit of time to work out their budget (it’s not always a one-person decision) or that they have time to find someone else if they need to.
- You keep your old clients on their old rates and only increase rates for new clients. Going this route generally leads to weeding out your existing clients as higher paying clients come on board. This might be an option if you’re absolutely certain existing clients won’t pay more, but you can’t afford to drop them all immediately (although that’s unlikely).
If you’ve raised rates, what approach did you take? If you’re thinking about it, which of these options is most appealing to you? Do you have any tips to offer newer writers who feel stuck in a position of wanting to raise rates but being afraid of losing existing clients?March 19, 2014 at 8:25 am #27089
I would say my typical approach is to charge my higher fees to new clients and increase existing clients in smaller increments. For my blogging projects, it’s a bit easier. I limit my ghostblogging to package deals (e.g., 3/6/12-month contract). I always contract a specified total number of posts (as opposed to X per week/month).
I have a long-time client with a 12-month contract. This year when I raised my fee to them, I did that by offering fewer posts for the same budget they had last year. That way I am getting more compensation per post and staying within their total budget.
Cathy Miller, Business Writer/ConsultantMarch 19, 2014 at 10:08 am #27091
I use a combination of methods — the third one you mention is my favorite, but also, I’ll work the new rate into the fee. Because my rate hikes are usually small and because I tend to quote per-project more than per hour, those paying per project never notice the change until I point it out to them. In most cases, if their bill goes up at all, it’s minor — under $100. But I do tell them that my rates have gone up recently.
The reason I don’t announce it outright to existing customers — many of them come back sporadically, often with gaps of months and sometimes up to a year. When they do come back, they ask “how much” for a particular project. I tell them. If the balk, and rarely does that happen, I mention that my rates went up three/four/five months ago.
For those I work with regularly, I do as Cathy does — incremental increases. I don’t raise my rate very often (maybe three times in twelve years), so it’s rarely a problem. I guess the key is to start at a rate that attracts clients who value your skills. That makes it so much easier to raise rates without a fuss!March 19, 2014 at 12:57 pm #27095
Cathy — That sounds like a great option for regular freelance blogging gigs. With package deals, every contract expiration is a chance for new negotiations.
Lori — Some very good points. If they’re already paying pro-level rates, they’re less likely to balk at a standard increase. It’s trying to raise rates that you set too low in the first place that leads to a bigger upheaval and client turnover. That’s why it’s so important to know what you need to charge up front. You can’t just pull a number out of your ass and hope it covers the bills, only to find that it doesn’t and you have to go back to square one with a new target market. Yet that seems to happen all the time!March 21, 2014 at 11:22 am #27119
And yet out of the butt those rates come sometimes, don’t they? I think it’s tough for beginning writers to really have the courage to charge what they should be charging. You figure they start in a pool that’s been waded in (among other things) too often — content mills or job listings that aren’t vetted — and they think that’s the going rate. Instead, as you well know, they should be setting a rate that’s in line with what other writers are charging. That’s not to say the first day you write you’re going to be pulling down $150 an hour, but if you’re charging $30 an hour, you’re way behind where you need to be.March 21, 2014 at 6:42 pm #27124
In line with what other comparable writers are charging is a good place to start. That’s they key. If you’re new, no, you probably can’t charge what a 20-year veteran writer can charge. You don’t bring their experience and successes to the table. But if you’re a competent writer with any kind of specialized knowledge, you certainly shouldn’t charge what lower-end writers do just because you mistake them for your competition. That’s why market research is so important.
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