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How to gracefully tell a client you’re raising your rates

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“How do I gracefully tell a client I am increasing my rates? I’m upping my hourly rate by about 35%, which is approximately a $12 increase. This client is bigger than any of my other clients, and takes up more time so they are important to me.”

This question was posted in the Millo Facebook group the other day and is a common question I hear from freelancers.

Telling a client you’re raising your rates can be especially nerve-wracking when you’re wondering how to approach and reach out to your biggest clients.

But there are ways to tell your clients you’re raising your prices do this without losing your cool.

Below are a few suggestions to smooth the transition and even a tactic that can even help land you extra work while raising your rates.

When the time comes, you’ll want to reach out to your clients via email. Start the email off with a friendly tone and keep these key talking points in mind.

Key Takeaways:

  • When raising rates, give plenty of notice and explain how the rate increase will give more value to your client.
  • Offer alternative solutions, such as a retainer agreement or project-based pricing.
  • Be confident and professional in your communication and be prepared to lose 10-20% of your clients.

Remind them what you’ve already done for them

You don’t have to go into too much detail, but remind them about all of the great work you’ve done while working with them. If you’re seriously considering how to tell your client about raising your rates, you’ve probably been with them for a while and have done some great things.

Now’s the time to remind them.

Again, don’t go into too much detail. You don’t want this to be a huge long email. Just a simple reminder on any big wins you’ve had with them.

Tell them you are going to be adding more value

Ask yourself what more you could be providing for your client if you were paid more. (It’s got to be something of value to them. Something that helps them and something they want. Otherwise, it’s not going to go over well.)

One idea I like is including a free strategy session or meeting each month to review their business and find areas where you can make improvements. This dovetails nicely with the tactic for getting more work while increasing your prices. More on that in a moment.

Explain why you’re raising your rates

Here’s where you make the case for why they should continue working with you even at a higher rate. If possible, relate it back to them and how it will benefit them.

For example, “Raising my rates will allow me to take on fewer clients and focus more closely on the work we do together and will mean better turn-around times for you, more availability, and more focus on your business.”

What client wouldn’t want to hear that? Just make sure that what you promise is something you can deliver.

Give them plenty of notice before you raise your prices

When raising your rates, it’s best to give your client at minimum a month notice.

Be sure to give them a heads up about when it will happen and give them plenty of time to expect it. 90 days would be ideal but 60 days can work too. But at a minimum, give them a month notice.

Letting them know you’re raising your rates in advance will help set their expectations, so they are not caught off-guard. It is much better than just springing it on them and surprising them. Nobody likes surprises.

Use this tactic to get extra work in addition to increasing your prices

Ok, so lets’ say you decided to raise your rates 90 days out. So if you are planning on telling your clients you are raising your rates July first, you’ll let your clients know by April 1st.

In addition to the advance notice, the other thing to do is tell them that you’ll be offering that added value—the complimentary sessions—starting in advance of the rate increase (since they are such valued clients).

So now they’ll be getting 3 additional strategy sessions/meetings at no extra cost to them.

Of course what you do on these strategy sessions is look for work you can do to improve their business. This conveniently lines up with an easy excuse for them to sign up for this extra work before the rate hike.

As a courtesy reminder, give them a second heads up about 30 days before the you increase your prices. You’ve now created urgency around your deadline, and this will sometimes spur clients to book that extra work with you before the rate goes up.

It won’t always work, but some clients will take you up on it.

If nothing else, this will smooth the transition from the lower rate and frame it in a value-added, “customer first” manner they’ll appreciate.

A note of encouragement

The last thing to remember is that you are valuable to your clients. Many freelancers have never experienced what it’s like trying to hire good people. It’s a huge pain to find competent people that can do the job.

Of course, there are plenty of people out there that could fill your spot, but it takes time, energy and sometimes money for companies to interview new people, get them in the system, get them up to speed with their workflow, etc.

There is a lot of risk in getting a new contractor on board.

Clients are risk averse and they’ll pay more for certainty. You are a sure thing to them compared to an unknown contractor, and just like employee turnover, contractor turnover can be expensive.

So when the time comes for you to raise your rates, it’s probably much easier for them to just pay the rate bump and keep things humming along than to start over and find someone else.

Remember that if you’ve done good work for them, you are an asset to them and they’ll want to keep you.

Have any other tips on how to tell a client you are raising your rates? Let’s chat in the FB group!

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Written by Ian Vadas

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Ian Vadas is a designer and the author of Work With Clients You Love. Get the eBook to learn how to select clients that pay well, treat you with respect and allow you to do your best work.

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Reviewed & edited by Adam Wright, at Millo.

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