After nearly 10 years in advertising, I’ve found pricing jobs for clients can be challenging and sometimes complex. Yet, if you’re finally at a point in your career where you have enough work and a steady stream of clients, you’re probably doing something right. Being able to maintain a good quality of work and keeping up with the rigorous demands of clients is great, but what if you want more? How do you grow your business when you can’t handle more clients? Perhaps it’s time to charge more for your work.
Now you have to ask yourself, “how do I convince someone to pay me more money for doing the same work that I did less expensively yesterday?”
Start by testing the market with either a client you can afford to lose or a new, smaller client. This allows you to see if you can earn more money for what you’re already doing and puts your growing experience in line with what you’re producing, thus pushing you up to the new earnings echelon.
Growth is vital for survival in business. However, sometimes charging a premium can create client loyalty. So to help you get this premium and charge more for your work, here are a few strategies to help.
Charge more by setting a base rate
Since we’re talking about wanting to charge more, you should also think about setting a standard for the minimum rate you’ll now accept. By doing this, you might choose not to do certain projects anymore if you can’t negotiate a higher fee. Doing a one-off assignment for a few hundred bucks may no longer makes sense, unless it can be a recurring thing. Everyone hates that time-consuming gig that’s underpriced and is no longer in your best interest.
By establishing a base price for your work, you ensure that you’re not diluting your increased rates with low paying and dull work. In addition, if you’re pricing standard is to high, you’ll be out of reach of many potential clients.
Don’t undervalue your skills and experience
I understand that when what you do comes naturally, it doesn’t feel right to charge a lot of money for it. However, as things become easier the more you do them, it causing you to think about charging less. Get that idea out of your head. For example, if you can design a good logo in a day instead of what used to take you a week, might still be impossible for your clients to create themselves. Don’t discount your skills or experience level when factoring your rate. Many professionals, from lawyers to mechanics, are paid certain going rates, regardless of the level of difficulty of their task. Like them, you should be compensated for the value you contribute. Factor the value of your skills and experience into the going market rate and charge that amount, instead of simply calculating how long or simple the job is.
Build current client pricing up slowly
While the need to charge more for work is usually good news for a growing business, it’s not always music to your clients’ ears — especially those who helped get your company off the ground. The most important thing is to be open about the price increase. If you’ve charged your clients the same amount for a long time and suddenly ask them to make a jump, it can make them nervous. A simple way to overcome this challenge is to change your pricing structure from hourly to a packaged deal or a project-by-project fee. This way no one gets sticker shock.
The other way to charge more is to let your clients know the full increase, but note that because they’re a valued customer, you’ll offer them a mid-rate between the old and new rates. Or you can also consider adding a bonus service. It’s hard for people to swallow paying a higher amount for exactly the same thing, but if you can throw in some extra services, it’ll be easier to accept.
Finally, if clients resist the increased rates, you can always consider keeping them at your current level, but with the understanding that in X months you’ll want to sit with them and renegotiate the contract. This gives you time to build up other higher paying clients and for them to adjust their budgets.
Begin new clients with your new, higher rate
One of the best ways to charge more with your rates is to ask for a significantly larger number the next time a new client reaches out for a job. It may be a figure you’ve been contemplating charging, but haven’t yet done so with current clients, because of current contracts or what have you. Since this new client is coming to you, you now have some leverage in the matter. If they agree to the rates, then you’ve just broken through to a new earnings echelon. And if they say no, it still leaves you open to negotiating something closer to your normal fee, which may look like a bargain to them.
Go ahead and take action
Decide on what pricing is right for your business, and then start drawing up how you’re going to implement it. Clear communication is key, but it’s also important to offer your clients choices and talk about the value you offer. The next step is to go ahead and take action. Nobody likes to talk about pricing, and it’s natural to be wary of telling your clients that prices are increasing. But it’s even worse to struggle along with prices that are too low. Doing that will either mean you have to cut corners on what you offer or perhaps even go out of business – neither of which are good for you or your clients.
If you’ve managed to successfully negotiate higher rates for your services, how did you accomplish it? Share your story in the comments below.