Working long hours for low pay can be extremely demoralising. You ventured into freelancing with hopes of working from home and earning a lot of money doing what you love. But the freelancing fees you set when you first began have not been raised upwards and you’re afraid to charge more in case you fail to attract new clients or retain existing ones.
You want to raise your freelancer rates but you’re not sure how. You’ve got bills to pay and mouths to feed so you don’t want to risk losing out on clients altogether. Yet you know you deserve much better.
When to Raise Your Freelance Rates
How do you know when to raise your rates? One key sign is when your schedule is full and you’re turning away clients. You’re then in a position to up your fees as well as letting go of the lowest paying clients you have.
Annual reviews are a good time to assess your added experience and skills, and adjust accordingly based on the added value to you bring to business owners.
New educational qualifications can also provide a reason to raise your rates if these add some weight to your credentials in the eyes of your prospects.
Your Perceptions of Worth
Raising your rates is actually not difficult at all. All the trouble lies in your perceptions of your worth and the unknown. There are clients out there, regardless of your industry, who will pay a lot more than you may currently assume to be an acceptable rate. You’ll discover just how much you’ve been underselling yourself when you push up against your self-imposed ceiling.
You have a lot of value to give to your clients and this value deserves to be amply rewarded.
So how do you go about raising your freelancing fees?
Increase Perceived Value
Perceived value isn’t the actual value of the services you provide. Instead it’s the value of your services in the minds of your potential clients. When you make your services seem more attractive to a prospect, compared to your direct competitors, you can get away with charging higher fees.
For freelancers this might include investing in an improved website design, developing better portfolio pieces, working on more targeted and intelligent marketing strategies, as well as reframing services in a different way so as to appear more beneficial to clients’ needs.
The improved design and portfolio make your website look more professional. Better marketing helps build your reputation as an industry thought leader and increases demand for your services, which in-turn increases your perceived value.
Of course, increased perceived value means putting in the work to be a genuinely valuable service provider. Before you raise your rates you might need to gain more experience, qualifications, or to invest in training.
Specialists are deemed experts in their specialized fields and can therefore demand higher rates for their services. When you have a portfolio and testimonials to back your assertions of being a niche specialist, you can charge more money.
While the service you provide, in itself, is valuable, where the true value really comes is in the information you provide your clients in their particular industry. A generalist can deliver good services but it’s the specialist who knows how to tailor those services to fit the exact needs of an industry type. It’s the specialist knowledge, which fewer people have, that calls for higher rates.
The Benefits of Raising Your Rates
Lower rates might result in more initial inquires, as you undercut your competition, but lower rates also attract the worst types of client. These are the clients who will see you as a cheap commodity rather than a skilled professional, and will treat you accordingly.
Raising your rates makes you look more professional. Clients will assume you’re more skilled, experienced, and capable of delivering high quality work. Clients are more respectful and allow you do get on with doing what you do best, thereby saving you time and reducing stress.
Higher rates also allow you to cut your hours and spend more time with family, whilst still earning more overall.
How to Raise Your Rates as a Freelancer
Raising your rates is as easy as adjusting the rate sheet you keep on your website or in your private records. But how do you inform your existing clients?
While working with your newly raised rates for all new clients, you decide on a case-by-case basis for your present clients. Some of these clients you might notify of a rate increase, while others you can freeze at the rate they are used to.
For clients where you think a rate rise is required, give them notice. Three months’ notice is a good time-frame. This gives them time to adjust their budget or find someone new. The latter option they may take is not a problem if you have better paying clients ready to fill the gap.
Raising your rates means you have to be willing to let some clients go. This can be tough and even a little sad with some long-term likeable clients. But if they are unable to pay you the rates you deserve and require then they are not doing you any favors. They’re clients, not your friends. Your business will never grow unless you raise your rates.
Before letting clients go, it’s important to ensure you have higher-paying clients already on-board and more similar prospects in your pipeline. This will avoid any risk of you ending up with nothing.
When letting go of long-term low paying clients, it’s best not to cut them adrift completely. Ease their transition. You can do this by referring them to a trusted and talented up-and-coming colleague, who works at the rates they are accustomed to. This demonstrates you genuinely care about their business.
If you treat these clients well, they may either find a way to increase their budget, or when they have a bigger and more important project, they’ll come to you as someone they can trust.
Raising your rates is easier than you think. Don’t miss out on extra income because of self-doubts and fear. Decide today if you’re ready to charge more for your valuable services.