How to Raise Your Rates (and do it successfully)
Why should you raise your rates consistently, and as you gain experience, knowledge, and become better skilled at what you do? Because, duh. But also because raising your rates is an essential part of running a business.
Before we dive into the nitty gritty, let’s talk about why (and when) you should look at what you’re charging right now for the time you’re committing to client projects, learning new skills, and being of greater value to those that benefit from your talents.
But what happens if you never raise your rates? One can only imagine that you’ll get swallowed up by your work, show everyone within 3 feet of you the self-awarded “busy badge”, your clients eventually value the service you provide less and less, and you’ll never see the sun. You are not a vampire. Raise your rates.
The more clients you work with, the better you get. Tacking on experience to your already glowing resume isn’t something you just brush off. The people that work with you get to benefit from all the years of experience you have right now. Think about that for a second—that’s freaking amazing.
The more committed you are to your work, the more skills you get to throw in your toolbox. Staying ahead of the curve, in whatever industry you’re in, takes patience, time, and dedication. Not everyone doing what you do has the same knowledge and skills you do. If you’re doing the work to stay on top of shifts in your industry that directly affect your current and future clients, that’s a big deal.
At least once a year. Most people raise their rates annually. We’ve found that dedicating a few days to review our services, rates, and what we’ve done to get better in the past year works great for us. You can certainly go in every 2 or more years to look at your rates and see about increasing them, but that’s a long stretch of time, don’t you think?
Mid-year. We’ve found the long summer season is the perfect time to spend a few days looking back while looking ahead. We review each project, identify areas where volume of work has increased, and discuss new certifications, training, and skills that we’ve added in the past year. Then, we increase our rates early fall, each year.
Here are 3 ways to make the whole raising your rates thing easy, not scary, and pretty awesome.
1) Look at your numbers and your efforts. If you want to continue offering a popular service, but think it’s pulling a lot of your time and energy away from other things... then you’ve got a sure sign that it’s time to increase your rate. You putting effort into something people want/need is valuable. There are a few questions to ask yourself as you dive in here:
- How much have you charged for this offer over the past 2 years?
- How much are your competitors charging right now?
- What amount makes it worth it to you to continue offering this service?
2) Be consistent. No one likes to get hit with a huge rate increase once every few years. Imagine if your internet bill suddenly shot up by 80%...you’d likely change providers. So, don’t do the same thing to your clients. Rate increases should be consistent and gradual. Slight rate increases once a year is a million times better than a whopper of an increase once every 5 years. People can digest small increases, but hitting them with an enormous increase is off-putting.
3) Be open to compromising. If a client says no to a rate increase, that’s okay. First, recognize that this is an opportunity to learn through conversation and a bit of negotiating. If you’re both willing, there are still ways to work together that’s truly a win/win. Look at all the pieces of your offer to the client and see if there’s something that can be taken away or reduced without affecting the overall quality of your work. If you can agree on a plan that allows the client to stay within budget while still benefiting from the results of what you do, then that’s a win/win.
We love this topic, so if you have questions, emails us—firstname.lastname@example.org. Or leave a comment below.
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