9 Ways to Charge What You’re Worth
The best thing you can do for your business is to raise your prices. You worry you’ll lose clients. However, if you’re already delivery great value – if they love what you do – then increasing prices may propel your business to another level.
Why you’re not charging your clients more:
- It feels uncomfortable;
- You think you’ll lose business;
- You get drawn into competing on price rather than the results you get for your clients;
- You think your clients hold all the power;
- You put too much emphasis on price.
9 ways to increase your fees
- Scrap hourly rates. The fact that you can complete a piece of work in, say, an hour does not mean you should only charge an hour. You charge a rate that factors in the years of learning and practice you committed to your profession; for the money you invested in your education; for the risk you take running your own business. Stop talking about hourly rates. Stop displaying hourly rates. Stop thinking about hourly rates. (If we hear you’ve been charging hourly rates, we’ll show up at your door.) Think project rates. Or retainer rates. Or minimum-hours-hired rates. Anything but hourly rates. Charge for the results you deliver not the time spent.
- Choose your timing. The best time to increase prices is after you have delivered a project your client is delighted with. You could email something like:
“Hello Sarah, thank you for signing off the final design for the Amcom end of year report. I’m delighted you and your clients love it. I think we smashed it out of the park! I have been reviewing my business and wanted to give you a heads-up that as of next month I will be increasing my price from $50 to $70/hr. We enjoy a good working relationship and you are familiar with the quality of my work and so I hope this increase does not present challenges but if it does I will be happy to recommend other freelancers to you… All the best, James”.
No apology, no hesitation, no justifying the price rise (it’s your prerogative). The first paragraph of the email reminds the client of the good work you do and it’s echoed in the second paragraph where you highlight the positive working relationship you’ve built with them. Finally, you make your position clear – in the friendliest terms possible – that if they do not agree to the price you will not be working for them.
- Target the correct clients. Make sure you’re targeting clients who are willing and able to pay your rate. (Some will never pay your asking price, others will). Decide which clients will not baulk at your rate and gradually let go of the others.
- Fade-in price increases. Build a base of new clients who pay your new price before announcing the price increase to your existing clients. In this way, should your existing clients leave, you minimise any financial loss.
- Refuse to play the price game. Stop caring about what your competitors charge. If you have targeted the correct market, price is not the primary factor in making buying decisions. Clients buy based on emotion: who they have confidence in; whose work they like; who they trust; who they feel understands them; who will get them the results they want. Your clients do not focus solely on price and neither should you.
- The more value you deliver the more you can charge. Can you make your clients’ lives easier? Can you make them look good in front of their clients? Can you anticipate problems they may have and offer solutions? Can you go that extra mile for them? The more you make their lives easier, the more you can charge. If you want to charge more, be the expert your clients automatically think of when they need the job done properly.
- Specialise. Specialists are paid more than generalists. You build websites. OK. You build websites for conference organisers. Better. Being a specialist means you know your client’s industry which makes their life easier and for that they will pay a higher rate.
- Think programs and packages. Trying to make a living doing lots of small jobs and constantly trying to find the next client is a tough gig. It leads to worry and burnout. Stop thinking about one-off jobs and start thinking about programs, packages and bundles you can offer your client. For example, a videographer could offer a package where he records three professional interviews for $5,000/mth (rather than trying to land three separate video jobs). He could offer this service to, say, large law firms who want to market their lawyers’ expertise. Another example, a designer could hold one day workshops for his clients explaining the latest design trends in their industry. Every profession is open to creating programs and packages.
- Your clients need you, too. Don’t assume the client holds all the bargaining power: they likely need you more than you realise. Clients have problems to solve; deadlines to meet; standards to uphold; output to maintain. They are often under immense pressure to produce results – results that you can deliver. If you have proven yourself a source of high-quality work and reliable performance, price is secondary. Results trump price.
- Make sure you are targeting the right clients: those who see the value in your work and who can pay.
- Before you consider increasing price, you need to have delivered great value to your clients.
- Assuming you have targeted the correct clients, price is rarely a deciding factor on whether to hire you or not.
- To get the price you want, you may need to find new customers; a new market or a new niche in your existing market.
- Decide how much you wish to charge. (Remember, you can have an hourly rate in mind but don’t divulge this to your client – only quote a project rate, never an hourly rate).
- Does your new price price you out of your current client base? If so, you need to identify a new target client, new market or new market niche.
- What package or bundle can you offer your new clients? This will allow you to set a higher price for your services from the outset.