Is It Time For You To Raise Your Rates?
For people who make their living by writing for others, particularly freelance writers, making enough money to justify what they do is very important. Not everyone who has the mind to write has the stomach to work freelance — it is hard work, involving a lot more than writing alone (e.g., marketing, administration, invoicing).
In these days when so much work seems to be outsourced overseas, it can seem unthinkable to consider raising our rates. After all, if we up our charges then certainly someone in India or elsewhere will undercut our prices. Well, if you are serving the low rung of the writing industry, then your concerns are probably valid. However, if you have set your standards higher than the bottom rung, then charging more for what you do is worth considering. Let’s take a look at some reasons why you should consider raising your rates.
Your Current Customers Are More Than Satisfied With Your Work
Those “at-a-girls” or “at-a-boys” should be a clear sign to you that your client is not only satisfied with your work, but has benefited tremendously by your hard work. Even in these days of financial pressures (tell me, when aren’t we being pressured?) you should be able to ask for more money beginning with your next project. My post office box, cable bill, health insurance, and taxes have all gone up in the past year, so why shouldn’t my freelance writing prices? Likely, you have been experiencing the same rise in overhead.
You’ve Compared Your Prices To Market Averages And Your Rates Are Low
I’ve discussed previously how to establish your rates and have learned to set my prices accordingly. Initially, when you first started out freelancing, you may have set your rates low in order to compete or perhaps you weren’t yet fully confident in your skills. Every one of your new customers should be charged at the higher rate while your existing customers can gradually be moved higher. In some cases you’ll need to replace current low paying customers with those who can meet your new pricing standard.
Tier Your Prices
I hope that you don’t have a “one price fits all” pricing policy! After all, you are charging more for work requiring extensive research aren’t you? If you are writing an article and it requires you to personally interview one or more people, you are recouping that time spent interviewing too, right? I’m not saying you should jack up prices without considering its impact on the project bid, but you may be bidding too low for something that requires a tremendous amount of work. Consider all of the factors it takes to completing a project and factor those costs into your final figure. If the customer rejects your rate, then they weren’t meant to be your customer in the first place.
Just Getting By Or Making A Living
If you are constantly struggling to pay bills every month, or working more hours than you should, or you’re not even able to set any money to the side for your retirement, emergency needs and more, then you must reevaluate your rate structure. There isn’t anything romantic about being a starving artist or a frugal freelancer — you work too hard at what you do and charging the market rate is what every person does no matter what their profession.
Matt,
Years ago when I was in the interior landscape business - a highly competitive industry, I hired a consultant to help improve our profits. After extensive evaluation of our business, he said, “Seldom do I have a single recommendation for a client, but in your case, the only thing you need to change in your business is to increase your prices.” He helped us design a computer program that kept track of all the labor, replacement plants, and other expenses on each client and determine the price based on the actual costs. When I saw that I was actually losing money on some clients, I was appalled. But I didn’t think I could raise prices without losing business since our rates were in line with our competitors. But as each annual contract came up for renewal, I visited the client and explained the rate increase. The only customers we lost were a couple of those that actually were costing us money. In most cases, the clients had no problem accepting an increase, in some cases significant increases, because they had been happy with our service. In a few cases, company policy allowed an increase on only a certain percentage without having to put the contract out for competitive bid. So I negotiated in those cases to increase the price in increments so they wouldn’t have to put the job out for bid and over a couple of years, I got the price to where I wanted it. That taught me a valuable lesson, because I really thought I was going to lose huge numbers of customers.
Lillie, thank you for sharing your experience.
Yes, increasing rates unilaterally doesn’t always work, especially if no notice is given to clients. An explanation will probably be necessary and, in the case of contract restraints, you may need to work around it by incrementally making changes.
I would hate for anyone to lose all of their clients. Then again, there are times when letting a low-priced client go could be in everyone’s best interests.
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