Everyone wants to grow. Grow professionally, financially, and get more stability for themselves and their family. Freelancers are no different. They want to grow too. For the financial growth of a freelancer, one needs to raise its price, as in the getting paid more for the same effort.
Raising the price is easier said than done. Most freelancers find it risky for they might lose some clients if they ask for a raise in the hourly rate. However, under-selling is only going to become counterproductive in the long run.
In this post, we discuss some tips on how to raise your price as a freelancer
Work on your numbers and do some background work
Asking for a raise is your right. However, work on your numbers as to how much raise you are seeking. You can take inputs from multiple sources, viz. inflation, your own financial goals, the client’s willingness to stretch in terms of price, your ability to communicate with the client about the new price and its value, etc.
The key point here would be to make the right estimate of everything, don’t underestimate too much that you give up the thought of asking for a raise or don’t overestimate that you scare away your client. Keep iterating on this and you will be a pro soon. (Don’t forget to read our earlier blog on pricing, here)
Communicate with your clients in Advance
As they say, ‘Through communication, there will be trust. And with trust, it will be possible to discuss problems of mutual interest with more tolerance and understanding”
If you have figured out a reasonable raise, communicate to your existing clients well in advance. If they are taken by the last moment shocker, they might not respond favorably. However, if they are communicated well in advance about the raise, the reason, and the value you bring on the table, the chances of an agreement are high.
Also, both you and the client have worked together for quite some time now. For mutual benefit, the client would like to continue with you only to avoid the financial and human cost of letting you go, searching for a new freelancer, hiring one, onboarding, etc. You both have invested in each other, timely communication will make the raise more acceptable.
Have a set schedule of raising rates.
Plan your price raise periodically around the same time. This reduces uncertainty and helps your client to plan its finances better. This can also be thought of as an annual appraisal which a regular employee also gets. This just makes communication and understanding far easier. Goes without saying that unplanned raises will project you as unprofessional and greedy.
Reward for loyalty
You and your client have been together in thick and thin. A small upfront discount when you increase your price will act as a great catalyst in enhancing the trust and hence the relationship.
It’s not the greatest of an idea to be rigid with your long time clients. A bit of flexibility can do wonders for you to retain a long term client further.
Don’t do a sharp increase and prepare alternatives
It works the same way as appraisals. Rarely do we get huge bumps in annual appraisal until unless we change employers also? As a freelancer, asking for a major raise is not going to work unless you are changing clients.
Also, it is always good to have a plan B. Try and prepare your alternatives in case the existing long term client does not agree for a raise. Plan B could be anything, not necessarily changing of clients, it could be any of the following:
- Ready to work on existing rates if a committed flow of work increases with a commitment for an interim increase later.
- A new client in the pipeline whom you can sign off in case the existing client is not ready to accept new rates.
- An in-between number that solves your financial goals and client’s financial constraints for some time.
Be empathetic to the client’s problems as well and do a steady raise periodically as mentioned above. For instance, It is fine to go from INR 500/hr to INR 550/hr, if you have worked with the client for a few months. It may not be correct to jump 50% and say INR 750/hr even if you have other clients at that price. Don’t make them uncomfortable and search for new service providers.
In the end, rising for a raise is your right. It’s key to your survival. Just use a more professional approach and you should be home safe 🙂
Wary about sales, read our blog on Sales 101 for freelancers!