Your clients won’t give you an annual raise like an employer might. If your rates are too low, few people will tell you. So how do you know?
It’s time to raise your rates when:
- you resent your customers or your work.
- working is killing your creative drive.
- you question whether the time you put into work is “worth it” at all.
Check, check, check? It’s time. Now to face the raising-your-rates music!
How do you justify the increase?
First, know that discovering you need to raise your rates means that you’ve been gaining valuable experience along the way. You know what value you create for your clients.
Holly Neitzel, an accountant who specializes in small business clients, was concerned the first time she sent out her new rates (doubled!) to a client:
“The client had no qualms about my new rate. I think it made him feel secure in the fact that he was hiring a professional. You know, you get what you pay for?!”
When you’re trying to justify your own rates, you often forget that inexpensive is often seen as “cheap.” Raising your rates can be a sign that you’re ready for new responsibility and more challenging clients.
Second, consider how you can further differentiate yourself in the market. Few clients are looking for jills-of-all-trades. What’s your expertise? What clients do you work best with? What specific & tangible problems do you ease?
By claiming your unique strengths, you make it difficult to challenge your higher rates.
What if you lose clients?
How would you like to earn the same amount of money and work less? That is a reality for some who raise their rates. Unfortunately, I’ve never experienced this myself. Each time I’ve raised rates, I’ve gained clients. And that’s not uncommon.
Raising your rates singles that you have something of value and many potential clients find that highly attractive. Sort of like a pair of Louboutins.
Bridget Pilloud, a life-shifter whose clients work with her to enact positive change in their lives, raised her rates this summer:
“The quality of my clientele went up immediately. I found myself working with people who could really take advantage of my advice. However, the number of clients that I served went down much more than I expected.”
Bridget discovered that in order to attract customers who would pay her rates and benefit most from her services, she needed to adjust her branding. Clearly an easier choice than getting by with less.
If you do lose clients, you might finally have the time & energy necessary to create more leveraged streams of income like workshops, digital products, or masterminds. Raising your rates may just give you the breathing room you need to take your whole business to the next level.
How do you handle existing clients?
Use this as an opportunity to evaluate which clients you’d hate to lose and which you’d hate to keep. You could offer a discount to favorite customers (and ask for a testimonial). If you can’t afford to fire your tough customers, maybe offer them a grace period–or let them go.
Tanya Geisler, a life coach who helps clients step into their starring roles, has been on both sides of the price increase dilemma. She suggests approaching clients directly:
“You could try to explain how your rate increase means you’ll be working with fewer clients and providing them with better service etc, but truthfully, when I’m on the receiving end of this speech, it rarely resonates. I get it. You’re in business. And you deserve to be compensated.”
Just communicate how your new rates affect your existing clients.
There are countless combinations you can use to make your work & life easier while providing great service to your clients – new & existing. Raising your rates is about taking care of yourself and your clients. Make sure you do it in a way that feels honest and full of integrity.
What’s holding you back from raising your rates?
If your relationship with the not-so-almighty dollar is holding you back from raising your rates, check out my digital guide on radically reframing your money mindset. Get the pdf package & name your own price. Or grab the Kindle version for Amazon!
A shortened version of this piece was featured yesterday on The Daily Worth. Not a subscriber? You should be! Sign up here.