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You’ve Decided To Raise Your Rates - Now How Do You Tell Your Clients?

As your experience and expertise grows, there inevitably comes a time when you decide you want to raise your rates to better reflect the value of your services. The tricky part - letting your clients know without alienating any of your ol’ faithfuls or scaring away any potential new ones.

Whatever the reason for your price increase, how you handle the communication of your rates rise could be the difference between whether you keep a client or see them huffing up the road to your competition.

Here are 10 rules to ensure your clients don’t baulk at an unwanted surprise when they open their next invoice:

1. Tell them what they stand to gain

It can be easy for clients to assume that you’re just getting greedy. To avoid this assumption, let customers know that your price increase is strategic to allow your company to grow while still offering the same level of great service.

Focus on what benefits your clients will be able to receive from your services - such as additional service or support, extra resources, increased availability, shorter turnaround. These may be things that you already do anyway, but you don’t actually promote as part of your service.

2. Demonstrate your value

In a similar way, emphasise the value your service delivers, even with a higher rate. Are there some simple add-ons you can deliver that will provide even more value to your clients? Have you done extra training, have new skillsets in your team or expanded your service offering?

Kari DePhillips, director of The Content Factory, says that how you communicate the rate hike is just as important as planning the increase itself.

“If you create a complete list of your accomplishments (including added value items that you don’t charge extra for) and show a lot of progress and goal achievement, the clients won’t want to end the partnership." – Kari DePhillips

“We contacted our clients and told them that they’d experienced more placement lately  because of our upgraded capabilities and talented hires, and we had to raise their rates for the first time in 12+ months if they wanted to keep our representation”, DePhillips says. “Some of our clients reduced their services but all stayed on and several took the rate hike without complaint”.

3. Tell it to them straight

Keep it matter of fact, with no beat-around-the-bush-small-talk. Your message should include three points: 1. We value your business. 2. Price changes are a part of business. 3. This price increase is justified. Peow! Peow! Peow! Message delivered. If you pad it out with fluffy small talk your clients will sense your lack of confidence a mile off.

Devesh Khanal, owner of web design company Devesh Design, finds that a direct, casual approach is the most effective way for him “ I say: ‘I’d be happy to do that for you. Also, just to let you know, my rates have gone up since the last time we worked together. They’re now $125/hr. Let me know if that’ll be an issue’. That’s it. If clients make a fuss, they’re out. If they don’t, all the better (and many don’t).”

4. Offer an alternative

If a take-it-or-leave-it approach feels a little too harsh to you, you could think about offering an extension on current rates to valuable clients. Consider presenting your services in different packages at set price tiers - if your clients no longer want to pay your gold package rates, they can opt for a silver package with reduced services.

5. Set a deadline

Don’t spring a price increase on clients without any notice, but set a deadline for the change and offer clients one last opportunity to take advantage of the lower rates. It will be best to schedule this for a time when your workload is a little quieter so you have the capacity to deal with an influx of work.

6. Don’t blame inflation 

Your clients don’t want to be told that they are paying more money but not actually getting anything additional for their fee. Simply blaming your rates raise on your own increased costs is a lousy way to frame it (even if it is the truth).

Allen Greer’s company, Miami-based digital agency, Fuze is experiencing a period of rapid growth, and Greer explains this to his customers with this approach: “I’ve found there is one fail proof explanation that I’ve never had a client argue with. It goes like this: our goal as a company is to continually improve the quality of our services. This means hiring the most talented people we can find to produce the best possible work. Our clients reap the benefits of improved quality, so it’s a mutually beneficial business decision”.

7. Remain confident

So you’re scared of telling your clients? Shouldn’t you more be afraid of the risks your business faces if you don’t raise your rates? Take a look at the work you’re already doing for clients. You’re good at what you do! Can they actually afford not to use you? Increasing rates is a standard business process, but you need to deliver the message with confidence or else your clients won’t be convinced that the increase is justified.

8. Where possible, have a conversation

If you have the opportunity, have a face-to-face conversation with your clients about your pricing. You should however always follow this up with an email or letter outlining the change and detailing your new rate sheet, just so you’ve got your backside covered in case they want to come back and question your invoice.

9. Set expectations

Khanal suggests setting pricing expectations with existing clients right after a ‘win’. “For example, I’ll say: ‘Great! I’m glad you liked the design. Let me know what else I can do. By the way - I’m raising my rates in the fall, so we can discuss that before the next project’. So you’re setting the expectations for a discussion later, and when you do bring it up, they’re not surprised”.

10. Don’t apologise

You’re in business; your aim is to grow and nurture a successful enterprise, and you need to do what’s right for you to ensure the on-going success of your agency. The reality is that clients should expect a price increase. It isn’t arbitrary, and you’re not here to negotiate. As Greer says, “Rate fluctuations naturally follow a company’s growth plan. You can’t grow by staying static”.

There is always a risk that you may lose your clients - whether they can no longer afford you or would simply prefer to look for an alternative option. That’s not necessarily a bad thing. You might feel the loss of a low-paying client in the immediate short-term, but it opens up your capacity to take on a higher-paying client to take that place. If you’re losing clients by the droves, then you're probably not really offering the value that you promise, and a service review might be in order.

To make things easier, we’ve put it all together for you below. This is taken from WorkflowMax's awesome ebook, 15 Emails to Keep Clients Happy. If you want 14 more email templates to keep agency clients happy then don’t forget to download it - it's free!

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Do you have any more tips? Share them below. And if you want to ensure your agency is charging what you're worth, then sign up for our up-coming FREE webinar with Jason Blumer by clicking on the link below!