Steps In Increase Freelance Rates For Clients

Steps In Increase Freelance Rates For Clients

Steps In Increase Freelance Rates For Clients

Steps In Increase Freelance Rates For Clients. Having long-term clients is the ultimate goal for any freelancer. They provide dependable work, consistent paychecks, and straightforward scheduling arrangements. When you realize that your rates have been too low in comparison to your skillset and level of experience, what do you do about it?

It can be difficult, but not impossible, to ask for a higher rate from existing clients. Providing you approach the subject with tact and consider how you can make it beneficial to both yourself and the client, you stand a good chance of getting what you ask for in most cases.

How to Raise Your Freelance Rates for Your Customers?

Increasing your hourly rate requires a well-thought-out plan of action. After all, you don’t want to end up losing valuable customers because you didn’t take into consideration how a price increase would affect their purchasing decisions.

While increasing your rate will ultimately benefit you, the way in which you present your request can have an impact on whether or not a client accepts or rejects it. Make use of the following strategies to increase your chances of getting your new freelancer rate approved.

1. Value-added services and products should be utilized

Value-adds are services and tasks that don’t necessarily have a high monetary value, but which save time, share knowledge, or provide convenience to a client instead of charging them more money. They can include any of the following, depending on your industry:

  • Clients can benefit from written guides and how-to documents.
  • Small add-on services at little or no additional cost (like providing a basic monthly performance report for free)
  • Expenses for insignificant costs such as software subscriptions are being covered.
  • Initiating additional rounds of review or editing

Offering value-added services is one of the most effective ways to persuade customers that a rate increase will actually benefit them in some way. So that you don’t waste too much time on them, they should be simple and straightforward for you to complete.

When requesting a rate increase, including some value-adds can help to soften your request because they make the deal more appealing to customers. As a result of paying you a higher rate, they will receive something extra, and the additional work on your part will be minimal.

2. Create Service Packages for your customers

Aside from increasing your rates for existing freelance clients while also providing them with something in return, offering service packages is another excellent strategy. Packages combine common services that are complementary to one another and are particularly useful for clients who are only paying for a bare minimum of services.

Although packages can differ significantly between freelancers and industries, the following are some examples of possible combinations:

  • Some freelance writers may offer packages that include one written article, up to two rounds of edits, and the delivery of the finished product via the internet to a content management system (CMS).
  • Graphic design branding packages offered by freelancers may include a logo, brand colors, fonts, and suggested styling recommendations.
  • Monthly social media marketing packages from freelance social media marketers can include branded graphics and scheduled posts on up to three platforms, as well as a monthly posting schedule.
  • Combining some of your services will increase the value of your work, allow you to more fully utilize your time, and allow you to strike a balance between charging a higher rate and expanding the scope of the work.
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Packages, as opposed to hourly rates, work best when they are charged on a monthly or per-project basis. You retain control over the amount of money coming in and have the ability to increase the amount of money you receive without having to specify an hourly rate.

If you want to pitch the package as a whole, rather than asking for a rate increase from $25 per hour to $30 per hour, estimate how long it will take on average and what you want your new hourly rate to be. For example, you could offer service packages starting at $500 per month that include X, Y, and Z services, among other things.

3. Modify your compensation structure

Sometimes it is not the amount of money you charge for a service that needs to be changed, but the pay structure that you use instead. If you charge a project fee, you may find that you put in more hours than you anticipated, resulting in the fact that you are not compensated for all of the work you do.

Alternatively, if you charge by the hour, you may find that tasks become easier to complete as your skills improve, resulting in you being paid less for higher-quality work. In order to ensure that you are not being underpaid, changing your pay structure is a good way to raise rates with current customers. Take a look at your pay structure and decide whether hourly or project-based pricing makes more sense for your small business. Communicate the change to existing clients at an appropriate time, such as when a contract is being renewed, as well as to any new clients you acquire.

4. Incorporate a Rate Review Provision into your contracts

One of the most effective ways to approach regular, anticipated price increases with clients is to include a clause in your freelance contracts that requires you to review and renegotiate your current rate on a regular basis.

Providing clients with notice of potential rate changes at specified intervals, such as every 12 months, in advance ensures that they are not caught off guard when you initiate a conversation about a new rate. This also provides you with the opportunity to benefit from predictable raises, which is uncommon in the world of freelancing and contracting. Just make sure that you discuss the clause with clients before the contract is signed so that they are aware of what is going to happen.

5. Demonstrate Your Value

The greater the value you bring to the table, the more your existing clients will be willing to pay you in terms of monetary compensation. First and foremost, ensure that you have successfully demonstrated your skills and abilities to a current client before beginning to negotiate rates. In the event that you have not worked with a client long enough to establish your expertise, it will be difficult to persuade them that you are deserving of a higher rate.

Your clients are likely to be business owners just like you, so think about how you can use your services to help them achieve their objectives. If you demonstrate your abilities to clients and demonstrate that you are an expert in your field, they will want to keep you onboard even if you ask for a raise. In addition, they will be more willing to give you additional funds because you have already demonstrated yourself to be a valuable and indispensable contributor.

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6. Request a Reasonable Sum of Money

It’s difficult to walk the line between getting a higher rate and keeping the client on the hook for a longer period of time when negotiating a rate increase. If you ask for too much, you run the risk of having your proposal rejected by the client, which forces you to either stand your ground and risk losing their business or accept a lower rate from them.

Before you ask for a higher rate, do some research to determine how much you should ask for. Consider factors such as your cost of living, business expenses, and the rates charged by similar freelancers with comparable experience in your field when determining your rate. The length of time you’ve been working with a client at the same rate will also have an impact on your request for payment.

Based on your financial requirements, establish a baseline rate or fee that you are willing to accept and then proceed from there. If you started out with a low hourly rate, avoid asking for a significant increase, such as doubling your hourly rate. Clients who have recently joined your company are better served by significant rate increases than those who have already joined.

7. Keep an eye out for a contract renewal

For clients who have been with you for a long period of time, you most likely have a contract with a renewal or expiration date. Because you are no longer bound by the terms of the previous agreement, now is an excellent time to bargain for a lower interest rate.

The fact that you will have had plenty of time to demonstrate your value to the client and establish a strong relationship is another advantage of aligning your request with a new contract. It is more likely that a client will want to keep you on if they recognize the value you bring to the table. This puts you in a strong negotiating position and increases your chances of getting something close to what you ask for in your request.

8. Provide a Notice Period for the event

Expect your raise to take effect later than it would if you were a full-time employee, for example. It is important that you provide your clients with reasonable advance notice of a rate increase in order to allow them time to prepare for the increase and make necessary adjustments on their end.

For example, a rate increase may need to be approved by more than one person within the company, and this may have an impact on the company’s financial planning. The accounting department must also be informed of the changes and given the opportunity to implement them.

In the case of freelance rate increases, the standard notice period is three months. Clients will have ample opportunity to ask questions, obtain approval, and make any necessary updates on their end during this period. Furthermore, if they refuse to accept the rate change, you will have an opportunity to find a new client to take their place.

9. Have a contingency plan in place

Don’t make the mistake of assuming that a client will respond positively to your request for a rate increase only after you have requested it. Clients will frequently want to negotiate, and some will even refuse to accept the higher rate outright.

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Prepare for either outcome by doing the following:

  • Identifying an acceptable range of values in advance
  • Choosing whether or not you are prepared to let the client go
  • Choosing whether or not to reduce your services in order to maintain the current rate
  • Identifying and hiring another freelancer to take on the client in your place.

Consider the following scenario: you’ve been working with a client for three years and have always charged the same rate of $25 an hour. Your hourly rate has increased to $40 per hour from new clients for the same work, and it’s time to discuss raising your rate.

Be sure to decide how much you’re willing to accept and whether you want to continue working for the existing client if they reject your new rate or make a counteroffer before reaching out to them. Depending on the situation, this could mean passing them along to a less expensive, more junior freelancer, or offering to do less work for the same budget.

You should be prepared for a variety of possible outcomes in either case so that you are not caught in a bind if the conversation does not go as planned.

How to Request an Increase in Your Freelance Rate

Whenever you ask for a rate increase, it is best to put your request down in writing. Prepare an email containing critical information about your rate increase, such as the following:

  • How much your interest rate is rising
  • When will it go into effect?
  • Why are you increasing your interest rate?

Maintain a courteous and professional demeanor throughout the conversation, and inform your client that they can contact you or schedule a meeting to go over the details or ask any questions if necessary. You should also express your gratitude to them for their business, which they will appreciate.

Here’s an email template that you can edit to suit your needs:

Hello, [client’s name].

Since we began working together, I’ve made an effort to broaden my skill set and expand the scope of my business. I will be increasing my freelance rate from [the current rate] to [new rate] as of [effective date of rate increase] in order to better reflect my professional experience and to assist in the growth of my business. My current rate is [current rate].

Meanwhile, I will continue to charge my current rate of [the current rate] until further notice.

I’ve enjoyed assisting you in expanding your business through the [services you provide]. This [length of time] has been a pleasure working with you and your team, and I’m looking forward to seeing what we can accomplish together in the future. Thank you for your assistance.

Contact us if you have any questions or would like to schedule a meeting. We will respond as soon as possible.

Thank you for your patronage!

[insert your email signature here]

In Conclusion

A rate increase will almost certainly be requested at some point during your freelance career, so be prepared to ask for one. The way you communicate your request, how reasonable it is, and how valuable your services are to the client’s business will all determine whether or not you are successful in your endeavors.

Prepare for negotiations by doing your homework in advance, standing firm during negotiations, and having a backup plan in case things don’t go as planned. Take what you’ve learned and apply it to new clients, charging them a higher rate right away, in order to maximize your earning potential and build a lucrative freelance career for yourself.

Begfair

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