Raising rates—doesn’t that just send a shiver down your spine or send you into a tailspin of what-if’s… At some point, you’re going to need to reassess your rates, which means you’ll need to increase them with your existing clients.
If you don’t do this the right way, you could lose clients, and then you’ve got no income, even though your rates now reflect what you really want to be paid. Bummer…
Before you start to stress out, follow my five tips below on how you can raise your rates without losing the clients you have.
Before we get started though, it’s important to note that one of the easiest ways to raise your rates is to do so with your very next client. But sometimes, that doesn’t always work, particularly if you’ve got retainers in place. So here’s some ideas on how you can raise rates with your existing clients.
Five Ways to Raise Rates Successfully
#1: Focus on profit, not client numbers
This is all about making strategic decisions to increase your rates with the clients you have, rather than increasing the number of clients you have.
The best way to do this well is to let your clients know 2-3 months out, that there will be an increase in their rates. If you want to soften the blow (depending on how much of an increase it is), offer them something extra as a bonus, or maybe only increase their rates by half of what you’re going to charge new clients.
The awesome thing about focusing on profitability is that when you increase your rates, nothing else increases, so that extra income is pure profit… this is where you wanna be.
#2: Test your market
When you’re looking at increasing your rates, do so with a couple of new clients first, if you don’t get much push back, then definitely look to increase your rates with existing clients.
It all comes down to communication — how well you communicate this information to your existing clients will determine how well they take it.
Be realistic too. If you’re increase your rates by over 20%, you can expect some massive push back. Instead, increase rates in increments over a 2 year period, this way it’s not all in one hit.
#3: Phase in your existing clients
This is probably the easiest way to bring your existing clients in line with your new pricing, phasing them in. As in point 2, provide your new clients with the new rate and hold back on increasing your rates with existing clients for a while.
A great way to flag the increase in price with them is to give them 1-2 months notice and that if they have any additional work they want you to do, that they should book it in now, and you’ll honor their existing rate. This is a great way to boost your business income.
#4: Highlight your value
When contacting your existing clients about a rate rise, make sure that you highlight the value you’ve provided to them, just like you would in a sales pitch to a new client, only now you can highlight how you’ve added to their bottom line.
When communicating with existing clients, use a line similar to this one:
We are increasing our pricing to reflect the outstanding results our clients are achieving, highlighting our experience growth.
If you can provide statistics, even better.
#5: Expand your scope
If you really want to increase your prices without too much hassle, consider increasing your scope by providing additional services or selling bigger packages. By bundling the services you provide, you can increase your profit margin.
So think about what you’re currently doing and how you can add to this, or sell a ‘deluxe’ version of this service. Maybe you could provide a few different options and then a course for clients who’d like to learn how to do this for themselves… this is a great way to capture a larger portion of your market.
The key to increasing your rates effectively with existing clients is all in the communication. If you give your clients plenty of notice and aren’t greedy, then you’ll have no issues at all.
Do you have any points to add to the above or an experience you’d like to share regarding rates and clients? Leave your thoughts in the comments below — I read and respond to every one of them!