When and How Should You Raise Your Rates?

It’s one of the trickiest parts of being a freelancer: Knowing when and how to raise rates on your current customers. I’ve been freelancing full-time for eight years now and I can’t say I’ve got this one completely figured out.

On the one hand, if you’ve had a customer for a long time, there’s a good chance you’re under-charging them now. Maybe you landed the customer when you were first starting out and your rates were lower. Or maybe simple inflation over many years has whittled away at the rate you’re charging.

But on the other hand, you don’t want to risk messing up a good thing. What if the customer balks at your higher price and threatens to walk away? There’s a chance that raising prices could end up costing you a customer.

Walking the Fine Line

It’s a fine line, for sure. Here’s how I handled rate increases for two customers. Both situations worked out well for me, but not without some trepidation.

The first is a client for whom I’d been writing weekly blogs for a couple of years. I’d gotten super busy with blog work and had raised my blog-writing price to new clients — and in fact, was turning away new blog clients at the higher rate. So logically I figured I had to raise my price to this long-term client.

I explained all this to him and while he understood, he balked at the higher rate. He actually would have paid it, but I could tell it would be a stretch for him financially. So I offered to compromise and meet him in the middle between his rate and my new rate. He was happy with this and so was I: While making a little bit less than I wanted to, I retained a great client for whom I’ve now been writing weekly blogs for going on five years.

Dealing With Budget Constraints

The other is a client for whom I write several different industry niche newsletters. They offered me their standard freelance rate when they first hired me, which was adequate, though below the rate I charged another client for similar work.

After a couple of years, I felt like it was time to push for a higher rate. I explained my rationale to the client in detail over the phone, pointing out certain aspects of the job that were particularly challenging. She asked me to write all this down in an email that she could run up the food chain to the decision makers, which I did.

A few weeks later I got a nice email reply from one of the “big bosses” saying that while they couldn’t budget the full amount of my requested increase, they could increase it by about half of what I asked for. I accepted this since I realized they had budget constraints and the alternative was to walk away from the client. Since then, I’ve gotten even more work from this client at the new higher rate and they are currently my biggest biller.

No One-Size-Fits-All Solution

The bottom line is that every client situation is different, so there’s no one-size-fits-all answer to the raising rates question. For me, it usually comes down to instinct and gut feelings: In both of these situations, I sensed the right thing to do, for both me and the client, and proceeded accordingly.

Most important, I was flexible. If I’d held firm with the blog client, he’d have grudgingly paid the higher rate — but he might also have started looking for another writer. And the newsletter client had a firm budget, which they stretched to meet my request as best as they could.

I consider both of these situations to be a win-win for me and the client. And that’s the best you can hope for when raising your prices.

Authored by Don Sadler

Don Sadler hung out his shingle as a full-time freelance writer in 2009 after working for several custom publishing companies over the previous 24 years. Visit www.donsadlerwriter.com or contact him at don@donsadlerwriter.com.