Whether you’re a solo-preneur, a small business, or a massive corporation, everyone has to raise their rates at some point. As the business grows, as experience is earned, and as things change, the needs of your business change as well. No one has ever said it’s easy talking about raising your rates with clients, but it’s not as bad as it may seem.
Today I’m going to offer you ten tips for raising your rates that won’t scare off your best clients. Follow these guidelines and you’ll find that the conversation is nowhere near as stressful as you thought it would be.
10 Tips For Raising Rates (And Keeping Your Clients)
As someone who has had this conversation more than once, I know how daunting it can be to talk about rates with your clients. That being said, it cannot be avoided if you want success and happiness in your career.
So, today I’m going to show you 10 ways you can make your next discussion about rates less painful for everyone involved (and keep your clients when it’s finished).
1. Be Honest
It may be tempting to sugarcoat your reasons or maybe downplay the changes in your rates, but neither of these are smart approaches to business. Your best clients have a relationship with your that is formed on trust, which is why honesty is key.
Tell them exactly what changes are coming, how the new pricing will be implemented, and ask them to voice any concerns or questions they may have. This will set the stage for a smooth conversation.
2. Explain Your Reasons (And How You’re Offering More Value)
The reasoning behind your increased rates could vary across a number of factors. Ultimately though, you should be prepared to explain these things in a way that shows your client how they are getting more value as part of the increased pricing.
This could take the form of additional features in a product, or more availability for your services, but always keep in mind that you should add value for your clients when you decide to raise your rates.
3. Offer Multiple Pricing Models
Depending on the work you provide for your clients, you should consider giving them several methods of payment. For example, instead of charging per hour, you could switch to an agreed retainer that covers a specific amount of work.
By doing this, you can increase rates, but also offer a different and perhaps more efficient means of tracking and paying for your services. Depending on your industry or craft, one pricing model may be more beneficial for everyone involved.
4. Expand Your Skill Set
Clients are more willing to pay a company a premium than a single freelancer. As you grow, look for ways to expand your personal brand and your online business. For example, you could start a blog and create unique and informative posts while also polishing up your writing skills.
If you have a professional website or blog, then you can argue that you’re expanding your brand and your business. This is a perfectly valid reason to raise rates as you take on new clients.
5. Offer Multiple Tiers of Services
Instead of offering a standard option for your services, you could introduce multiple tiers under your new rates. The older rates could now be charged for a standard level service, while the new rates are for a “premium” level of those same services.
In some cases, clients will stay with the standard rates, but in most cases they will want the best version of your services that you can offer. Using a word like “premium” to describe this level of service will also be enticing for them.
6. Stay Confident and Courteous
When speaking to your clients about something sensitive like raising your rates, remember the tone that you take. This applies to your wording and your voice if you’re speaking over the phone. Remember to maintain these characteristics during the conversation:
- Explain your reasons in a confident and non-defensive tone.
- Showcase any investments you made into training or additional availability to justify the increase.
- Provide real examples of how you’re offering additional value.
Remember to have these conversations at least two weeks before you implement the new rates. A month is more ideal, but the idea is that you shouldn’t spring your new prices on the client. Give them time if needed to decide what they would like to do going forward.
7. Throw in a Freebie
If your client seems like they are looking for the exist when you mention higher rates, give them a reason to stay. Offer them a free sample of something they’ll be getting as part of these new rates. In some cases that could be a small service or a portion of your new product.
Either way, this is a good way to pull them back into the fold and play off of their curiosity and their desire to see what value they could be getting if they stick around.
8. Give Them Fair Notice
The worst thing you can do in this situation is spring the news on your clients. Let them know well in advance that you plan to change your rates. Reach out to them several weeks before the change and explain everything in detail.
This will help ease them into the new model without making them feel like you’re throwing them a curve-ball.
9. Enter a New Market
If you find that your current client base isn’t responding to the new rates, you could consider branching out and trying to enter a market with more affluent clients that will readily accept your new pricing.
You’ll need to network and possibly revamp your services, but it could lead to a more diversified client selection and ultimately better rates for your growing business.
10. Offer Entry-Level Discounts
If you have clients that prefer your services because of competitive rates, you can ease them into this new pricing model as well by giving them a discount for the first few weeks or months in the new pricing model. This way they can see the improvement and the value and decide if they want to continue paying at the new prices when the promotion is over.
More often than not, your clients will see the value being offered to them and happily spend the extra money to continue using your services.
Raising your rates is a fact of business, but you also don’t want to lose clients. Follow these tips when you are planning on raising your prices and you’ll find that your best clients are extremely understanding and willing to work with you.
How do you discuss price changes with clients? Let us know in the comments!
About our writer // Ralph Scharf is an experienced freelance writer and blogger with over a decade of experience writing online. You can follow him on Twitter @ralphscharfllc1