How to Raise Freelance Rates Without Losing Your Best Clients
There is nothing scarier when it comes to freelancing than losing your favorite clients when you increase your rates. Rate hikes are an inevitable part of doing business, and at some point, you will have to have a not-so-comfortable conversation with your clients about your increased rates. Over the years, I have learned a thing or two about how to raise freelance rates without losing my favorite clients. Here is what I do to keep moving forward in my business without leaving my best clients in my dust.
Truth be told, when you raise your rates, you will lose some clients, but those who value your work will stay with you if you find a system that works. Remember, the clients who jump ship do not belong on the rest of your business journey, and you’ll be okay without them, even if it feels like the end of the world. Freelancing is amazing because one client does not make or break your business.
How to Raise Freelance Rates
Try these actionable tips to help you raise your freelance rates and keep your clients happy.
Include Rate Increase Intervals in your First Proposal
If you are new to freelancing or not charging top rates, you should be giving yourself regular raises. Depending on how much you are raising your prices, these can be every six months or once a year. When I first started freelance writing, I was charging bottom of barrel prices to build my portfolio but worked in a small rate increase every 90 days. I did lose quite a few clients once I hit a specific price point, but I held on to the ones I wanted to work with by letting them know what to expect when working with me.
Send a Courtesy Reminder
Even if you’ve outlined your rate increases in your initial contract, don’t just send an invoice with your new rates when the time rolls around. Instead, send out a reminder that the rate will increase 30 days before their rate increase will go into effect.
Here’s what I send my customers to get them ready for the rate increase:
Hey [client name], just a heads up that my rate increase goes into effect on [date]. I appreciate you sticking with me and your continued business. I’ve learned so much by working with you, and I am excited to continue bringing added value to your writing projects. If you have any questions, please reach out to me directly. You can refer to the attached calendar for future rate increases.
This reminder helps avoid clients being caught off guard by the increased rates and gives them time to adjust their budget for freelancing projects before getting a bigger invoice the next month.
Give them Time to Acclimate to New Rates
Sometimes, even with the rate increases included in your contract and your courtesy reminders, your clients won’t be ready to acclimate to your new rates. In some cases, your best course of action here is to give them an extra month to start paying your new rates. Be careful with this practice. The last thing you want is to get your clients used to discounts and leeway to pay their invoices for projects.
If you are making an exception to your rules for your favorite clients, make sure they know this is not common practice. Send a new contract showing them the new date they will have to start paying your updated freelancing rates. If they ask for another extension, be ready to replace this client. Not all clients are meant to stay with you long-term.
Keep Communication Open and be Ready to Negotiate
When it comes to keeping your clients retained, you have to be open to communication and ready to negotiate. While the best-case scenario is to have your clients immediately accept your new rates, you need a backup plan in case they object to your new rates. I like to use the BATNA (Best Alternative to a Negotiated Agreement) theory when it comes to negotiating with clients. Let’s break down what this looks like for a freelancer.
Best Alternative to a Negotiated Agreement
Before I enter any negotiation with a client, I work out what my best alternative to a negotiated deal is. This can be sourcing a new client, taking another client off my waitlist, or even having some much-appreciated me-time. I attach a dollar amount to my alternative, and keep that dollar amount in mind when my client wants to negotiate a lower rate.
In some cases, a slight decrease in your new rates is in your best interest. Say you have a client on your waiting list that wants four articles per month, and they are willing to pay your new rates. But, your current client gets 12 articles per month, at a slightly lower rate. Now, you need to calculate the time it will take to replace the other eight articles per month at your updated rates. If you don’t have clients clamoring to your inbox for new projects, it’s not going to be an easy task.
In these cases, look at your current income with your client vs. your best alternative and find common ground where you are still getting an increased rate, but your client feels like they have gotten a good deal. Keep your BATNA in mind to know when it is time to walk away from a deal. Bigger than knowing your worth, know what your time is worth when it comes to replacing your clients, and know the worth of a long-term client vs. a one-time project.