Raising Your Rates: Consider this first

Raising Rates Blog V3 Final
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We use Keap, specifically the Max Classic version, to send you this article each week. Anyone who’s checked it out knows it’s not inexpensive.

And last week we got an email that the price is increasing by 10% starting in October.

It’s happening more and more – opening emails (or even going to the grocery store!) to find prices increasing left and right. This morning I went to the vet and discovered they raised the price of my dog’s allergy shot by $12 and of our annual membership by $11. Are you seeing it?

If so, or if you haven’t raised your rates in a while, it may be time to increase what you charge. 

Some things to consider when it comes to your rates:

  • Bill by the project, not by the hour. If you’re doing task/project work and are good at it, you’re penalized financially for working faster when you charge by the hour.

    If you charge by the hour and feel you need to stay there, determine if there are industry rates for what you do – similar to how a mechanic charges a flat fee per job regardless of whether it takes them half the time or twice the time of the standard industry timeframe.
  • If billing by the project or via flat fee, are you over-servicing that client to the point where they’re no longer profitable?

    If you’re billing a flat fee and regularly spending more time on that client than you projected when quoting the fee, you’re actually paying (in time, money and energy) to have them as a client.
  • Look at the last time you raised your rates. If it’s time, for new clients, start sharing your new fees immediately.

    For existing clients, this is a good time to let them know you’ll be increasing your rates on January 1st — you can offer to grandfather them in at current rates for all agreements signed by X date if that feels good.

If you choose to raise your rates and a client refuses to pay the new fees, you have a decision to make:

  • Grandfather them in at existing rates (for X amount of time) and closely manage the time you/your team put in if project/flat fee or ensure fair billing (to you and your client) for how long things take, if hourly.
  • If a project rate or monthly flat fee, consider reducing the services provided to ensure you’re profitable.
  • Confirm that these are the new rates as of X and if not acceptable to them, you completely understand and will begin the process of winding down.

Not sure if you should raise your rates?

Think about the value you provide. Are you/your team easily replaceable?

If so, focus first on increasing the value you bring. For example, if your skillset/business can replace two other team members/vendors, it makes sense for you to charge more and for your client to pay you more as they’re saving overall.