Dear Dr. Freelance: It seems like every freelancing site out there talks about raising your freelance rates, but I’m hesitant to just do an across-the-board announcement for fear that I’ll lose clients. What’s the best approach to increasing my fees?—Ready for a Raise
Dear RFAR: Yes, “raise your freelance rates!“ is a common rallying cry, and I believe it’s a reaction (and occasionally an overreaction) to all of the lowball clients and content mills out there. As far as how to increase your profitability through higher fees, here are a few approaches to consider when giving yourself a raise:
- The Grandfather Clause: Existing clients get to stay at my current rate, but I’ll quote new clients at a 10-20% higher rate—which avoids the client exodus that you’re concerned about. If you’re in the business long-term, you’ll eventually need to make the business case for raising loyal client prices, too, but a stronger relationship makes that conversation easier when the time comes.
- The Stealth Raise: Think about it this way: If you’re not a public utility, why would you even announce a price increase or make a big deal about it? Obviously, this one is easiest to implement if you’re calculating estimates rather than working on an hourly or per-word basis—just build in another 10% (or whatever) for yourself. As long as it’s a modest increase, you’re the only one who will ever know.
- The Circumstantial Increase: You don’t have to permanently restructure your pricing, of course. Instead, put a hefty premium on jobs during busy times or during the holidays. Consider it like giving yourself overtime.
- Swap Sheet: Personally, I don’t provide a price sheet on any of my web sites, but some freelancers swear by them. So, this would mean simply uploading a new price structure for people to see. You’d want to have a conversation with existing clients in order that it doesn’t come as an unpleasant surprise.
Do you have a killer strategy for raising your freelancing prices? Please add your comment below!
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Thanks for sharing this freelance guide. Usually freelancer worries about their rates because some clients are always looking for cheaper price but I guess if you have great skills you will definitely get a better job.
I had stopped working for a client a year ago because of scheduling problems, and they told me if I ever wanted to come back, just say so. My schedule freed up recently, and I said I’d come back for a 20% increase. They immediately said yes. Dang! Should have gone for 25%.
@Outsourcing, thanks for the kind words. My philosophy generally is to leave the cheaper-price clients to someone else.
@Jeanne, your anecdote reminds me of the French phrase esprit d’escalier: meaning literally wit of the staircase, or “When you think of the perfect verbal comeback…after you’ve walked away,” which I learned at this article (along with a couple of other foreign words with cool meanings). Thanks for sharing, and definitely ask for 25% next time!
I don’t have any killer strategies for raising my rates. I wish I did. I charge what I think is fair, which involves market rates, my skill and career longevity, and the type of work being done. I’ve heard outrageous suggestions, such as I should raise them a certain percentage every year no matter what – and if I had done that, I’d be commanding quite a sum by now.
One way I increased my own profitability was by setting better client boundaries as I got more confident. I no longer tolerate mission creep and long pointless phone calls and casual requests for free feedback and ideas. If I do work, I bill for it. Amazing how much that affected my income for the better.
@Valerie, you know, I’ve never understood how raising your prices 5-10% every year (just for the sake of raising them) was anything but a shotgun approach to business strategy. A lot of folks get awfully strident about absolutes in pricing; I’ll admit that it took me a few years to find my sweet spot, but even when I started out, I wasn’t cheap! (Couldn’t afford to be, as the sole wage earner with a wife, two toddlers, & a mortgage…)
Your point on profitability is spot on: clarity and client boundaries are absolutely essential.
Thanks for the suggestions. The Circumstantial Increase is particularly on target.
@Valerie, excelling points about setting clear boundaries up front.
@Dr. Freelance, what’s your philosophy on hourly vs. project rates? (Provided, of course, the project parameters are clearly identified.)
Mitch, thanks for reading and commenting. Your question about hourly vs. project rates is a good one, and an important business factor for freelancers to get right–I’ll respond in one of my posts this week.
Thanks, I’ll be looking forward to it.
And @Valerie, that should’ve said “excellent” not “excelling”! Fingers sometimes have a mind of their own.
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