The right way to increase your freelance rates without losing clients
You aren’t being paid… Scratch that. You aren’t being paid what you’re worth. You bend over backwards for your clients. But they have no idea how hard you work. How much effort it takes to do what you do. So they nickel and dime you to death. They use special phrases to send you hints. “This is an easy project, should only take you a few minutes… right?” When you both know it’ll take at least two to three hours to complete.
But they don’t stop there
They haggle and complain. They use your fears against you. They know you’re afraid of losing them, that you’ll do whatever it takes to keep their business. So they squeeze you financially. After a while that manipulation starts to take its toll. It leaves many designers drained and crippled with fear.
- “All my customers will leave if I increase my prices.”
- “I’m working more but earning less, how will I survive?”
- “Just have to work harder, that’s about all I can do.”
Left unchecked, a client’s bad behavior can induce learned helplessness. Designers give in and accept the abuse. This doesn’t have to be you. You can be the designer that commands higher prices. You can attract clients who pay your fees without a second thought. The kind that values your time and your expertise, seeing you as the expert you are. But you’ll need to understand why they reject price increases before you can get them to pay whatever you ask.
Why clients reject price increases
Clients say “no” for many reasons, but most of their reasons boil down to eight specific things.
- Loss of control: Forcing changes on clients, telling them “this is the way it is” creates feelings of helplessness. How do they regain control? By resisting.
- It’s surprising: If your clients are used to spending $2,500 for a small site and you suddenly ask them for $25,000 your client’s answer will most likely be “no”.
- It’s too different: Your clients are comfortable with PHP and WordPress, or you recommend asp.net and Sitefinity, and they want to know why. If they don’t buy in to your plan, a “no” is probably on its way.
- Bitterness and resentment: You’re brilliant. Your client thinks you’re a magician. But you embarrassed them that one time in a meeting in front of their friends. Now they’re carrying a grudge. You’re definitely getting a “no”.
- Too much uncertainty: Your client hosts their website, media, thousands of files — with Amazon web services. You want to switch to a new provider they’ve never heard of and you don’t have a plan. They’re going to say “no”.
- Distrust: You’re more likely to hear a “no” if you’re asking for a change but your client doesn’t believe you can pull it off.
- Too hard, too much work: Your client relies on Windows Server 2012. You’’d like them to use an Apache Server instead. You’ve presented an airtight case for switching but it’s just too disruptive to their business. They turn you down.
- Ripple effects: Something’s disrupted their business. Instead of spending their time and money with you, they feel they have to put out other fires first. They turn your offer down.
It’s always possible there’s a different reason, but these are the most common.
Here’s how you handle these problems
You create the perfect solution. We’ve just gone over the reasons why clients say No. These reasons are unpleasant but they give us a clear idea of the ingredients we’ll need if we want our clients to say Yes. The perfect solution…
- Gives clients controlled choices: Your clients don’t know what they don’t know. Controlled choices (do you want A or B) gives them control.
- Tells the whole story: Let’s say you’re creating a new service. Which detail will get each and every customer to buy? Don’t know? Neither do I. So you tell them everything.
- Makes small, incremental changes: If your clients are used to spending $2,500, change the price slowly. From $2,500 to $3,000. $3,000 to $3,500 and so on.
- Prepares clients for change: Don’t spring a new idea or change on your clients without warning. Give them regular updates on a schedule.
- Is trustworthy: Show clients, via social proof, certifications, etc. that you can do what you say you can.
- Is simple and/or easy: The easier it is for clients to do what you’re asking, the more likely they are to do it.
- Includes everyone who’s affected. Will other departments need to use your work? Are other people influencing the buyer’s decision? Make them part of the process if you can.
- Is respectful and kind: Most of us know this already. But it’s an incredibly common mistake. Disrespect becomes a problem when othering and purpose conflicts come into play.
If you follow these steps, your client is primed for a yes. It’s not guaranteed, just far more likely. But, we’re not all the way there yet. We don’t know when we should increase prices, or how.
Clients tell you when to increase your prices
… If you know what to look for. You’ll need to know who you’re dealing with first, before you know when. Knowing who you’re dealing with sets the tone for everything else. You’ll know which customers you can approach and how to structure your offers.
- Opportunists: I call them “Groupon Clients”. These are the clients who demand spec work, wanting you to give them everything for next to nothing.
- Noobs: are inexperienced clients who need lots of hand-holding and support. Often times they’re in over their heads, overwhelmed and full of questions.
- Victims: are wounded. They’ve been burned by someone in their past: a designer, partner, etc. They’re extraordinarily sensitive and very suspicious.
- Forgetful: These clients tend to have a lot on their plate. Typically they’re juggling multiple projects at once. They’re forgetful so they need hand-holding that’s free from condescension and contempt.
- Ideal: clients have their act together. This isn’t their first rodeo. They have healthy expectations and they’re free from heavy trust issues. These clients expect a lot but they’re a pleasure to work with.
See the differences between these clients? It’s enormous. It’s also the reason why a one-size-fits-all approach to pricing fails when you’re selling services.
- Opportunists won’t tolerate any price increase. Keep them around if it’s worth your time. When you’re ready, let them go.
- Noobs want lots and lots of help; eventually that becomes difficult. They genuinely need help, but your time is limited. So you bundle the things they need help with together and you offer them a (bigger) set price.
- Victims want help, but they need to know they can trust you. Continually remind them that you’re trustworthy by validating that trust with your work. Then, and only then, can you offer them a higher price. Increase your price only when you’ve dramatically increased your value (e.g. free hosting with design services over X amount).
- Forgetful clients want reminders. If they see the value of your work, that you take care of things for them, they’ll be more willing to pay for that right. Increase your prices only after they’ve developed a habit of depending on you for the things they need.
- Ideal clients want you to exceed their expectations. They want to be satisfied. Have you ever heard the saying “under-promise and over-deliver?” This applies to ideal clients. They’re more likely to go for a price increase immediately after they’re satisfied.
Did you catch the window of availability? These clients are more likely to say “yes” to your price increase, if you time it right. This just leaves us with the question of “How?”
Here’s how you increase your prices
You use positioning. But that’s the problem isn’t it? The vast majority of designers “tell” their clients they’re raising their prices. They don’t ask. This is because the traditional mantra says you shouldn’t have to ask permission — that’s apologizing for raising your prices. That take it or leave it approach tends to backfire, because clients are given the wrong kind of choice. They’re asked to make a “Yes or No” choice. What if you gave them a “Yes or Yes” choice? Suddenly you’ve removed “no” from the equation. Clients aren’t forced into something they don’t like, they’re enticed into something they can’t wait to buy. Let’s compare “Yes or No” to “Yes or Yes”.
Yes or noDesigner:
Effective March 31st, I’ll be increasing my rates from $50 per hour to $150 per hour. Client: Wait, what? Why? More money for the same service? How do you justify that? I dunno if I… Designer: My expenses have gone up, so I’ve gotta increase my rates…
Yes or yesDesigner:
Hey, I’ve got some great news! From now on, web design clients get free maintenance and hosting. Clients: Seriously? How can you afford that? What’s the catch? Designer: We’re offering this to clients that upgrade to our concierge service. It’s something we’re offering to our best clients (you’re one of them). You’re paying a little bit more up front, but you’ll save three times as much as you’re spending for both right now. Client: Okay… that sounds amazing. A little too good to be true but, amazing if this is legit. Tell me more. Designer: We can keep things as-is. We’re also offering a free trial. Try it! If you hate it you can always go back to the way things are right now. See the difference? We’re not asking clients to choose between “Yes or No”. We’re asking them to choose between “Yes or Yes”.
Some clients will leave anyway
It’s true. Do everything right and some clients will still choose to walk away. Relationships end for a wide variety of reasons. Handle it well and it won’t be due to price.
But I don’t want to lose any clients
Losing a wonderful client is painful, especially if you’ve built a wonderful relationship with them. The relationship may end professionally but it doesn’t have to end personally. Make the right moves and you’ll have a list of new clients who are eager and ready to buy.
This sounds like too much work
You might think, “Learning about each client, planning my moves carefully, moving slowly… it’s too hard. I’m not sure if I’ll be able to do it.” It can feel overwhelming if you’re doing this for the first time, but it’s not as hard as it seems. Simply set a goal (e.g. I want to make $175 per hour or increase my prices every year by 15 percent); then, once you have a clear goal in mind, use the strategies I’ve shared to reach that goal.
You should be paid what you’re worth
You take good care of your clients; it’s important that they take care of you. If you want to increase your prices, it’s important to ask the right way. Give your clients the things they need to buy in to your request. Great clients are reasonable. Give them a compelling reason to pay more and they will. Give them the ability to choose, and they’re far more likely to see things your way. But it only works if you ask. Do it right, take it slow, and you’ll soon be paid what you’re worth.