Raising Your Rates? Do These Things First
Discussing money-related issues with clients can be nerve-wracking, and if you’re considering raising your rates, you may be wondering how to go about it. However, as you gain more experience and market rates continue to rise, it’s inevitable that you’ll need to raise your rates. While it’s a delicate subject, it doesn’t have to be difficult if you communicate it in the right way. And if your clients know your worth, chances are they’ll be receptive.
Before you have the conversation, though, you should be prepared. Below we’ve included our tips for how to tell your clients you’re raising your rates.
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Be confident in your value.
Before you can consider a rate change, you need to be confident that you’re worth what you’re charging. Many small business owners question themselves when it comes to raising their rates, but not because they don’t know their value. Rather, they’re concerned that clients won’t think they’re worth it, and they could end up losing business. While raising your rates can be daunting, don’t second-guess yourself. If you have confidence in the value you’re providing, it’s likely that your clients will, too.
Do your research.
If you’re not confident about how much you should raise your rates, start researching the market. Look into what your competition is charging to see how you compare. If your company has a unique value proposition, take that into consideration, as it may be further justification for raising your rates. If you have a handle on industry rates and know where you stand among the competition, it can give you the extra validation you need to raise your rates.
Have a game plan.
Deciding to change your rates isn’t something that happens overnight. It can take months to research and evaluate how much you should raise your rates. Once you determine the new rate, you need to figure out how to effectively communicate the change to clients. Across the board, you’ll need to communicate the change in writing, so you can get written consent from the client. However, depending on your relationship with the client, you may want to first mention the rate change over a phone call or an in-person meeting as a courtesy.
Manage client expectations.
Regardless of how you decide to communicate the change to clients, make sure you give them at least a few months’ notice before raising your rates. If they’re prepared for the change — and it doesn’t come as a surprise — they’re more likely to respond well. Not only is it good customer service to give them advance notice, but also they may need the extra time to get internal sign-off on the rate increase.
Use your new rates with new clients.
Before you raise your rate with existing clients, you can start applying your new rates to new clients. By doing this, you can earn extra income while testing your increased rate with prospective clients to see if you land new business. If you do, it’s a good indication that raising your rates is the right move for your business.
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