Self-employed individuals have flourished throughout the recession in the UK, with around 40% of all being created by freelancers and contractors. The number of freelancers has also increased by 9% since the beginning of the recession, and it’s thought that employers are choosing to go down the outsourcing route thanks to the savings that can be made.
However, even freelancers that have a constant stream of clients coming through the door may need to up their rates at some point. This could be because:
– The cost of materials has increased
– Their general cost of living has increased
– Some of the freelancer’s higher-paying clients have gone elsewhere, leaving them with a group of smaller clients
No matter what your reason for needing to increase your rates though, you can guarantee that it’ll be quite a stressful time for you. Not only will you need to carefully consider your rate increase to ensure you get the right amount and don’t need to increase them again later in the year, but you’ll also want to second-guess your clients’ reactions.
This, however, can be easier said than done. There is a way to increase your prices without losing your clients though, and here’s how:
# 1. Follow the band aid method
As they say, it can be easier to remove a plaster all in one go rather than slowly peeling it off. The same can be said of your rate increase – do it quickly and you’ll see minimal fallout.
Say your current rate is £X and you need to increase it to £Y, which is a hefty 50% higher than your current rate. Slowly increasing your rates from £X to £Y over a number of months could make your clients feel displeased, as they will never know when the next increase is coming. Going from £X to £Y in one go though, may take them by surprise initially but they will quickly become accustomed to your new rate.
# 2. Be honest
Honesty is without a doubt the best policy in this situation. There’s no point lying about your reasons for increasing your prices – let your clients know exactly why you’re doing it and they’ll be more likely to stick by you for your truthfulness.
If you have to increase your prices because of the cost of materials, give them a real-world example that they can understand. Explain how the cost of materials can accumulate and how they are essential for your work.
# 3. Thank your clients
When increasing your rates, thank your clients for their commitment to you over the time they have contracted out to you. Explain how much it means to you that they have chosen your work, and let them know that you plan on working even harder with your increases. Acknowledge the fact that they too may be going through their own money problems.
# 4. Give them something for nothing
And of course, before you leave them with your rate increases, make sure you sweeten the deal for them. Give them a chance to make use of one of your services completely free of charge, such as a free website audit for web designers or a complimentary system check-up for IT consultants.
Raising your rates needn’t mean you lose out. You can easily keep your clients with you by being honest, and by giving them something for nothing in return for their continued business.
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