Whether you’re a Fiverr freelance writer, designer, or any other type of self-employed professional, there comes a point when you must reevaluate your pay scale. Though the reasons to adjust rates are usually logical, it can still be tough to know how to tactfully raise freelance rates with existing clients and establish your new pay grade for future ones.
To help you navigate this season, here is a step-by-step guide to raising freelancing rates. Learn why and when you should raise your rates and how to approach existing clients.
Though it seems to be a rite of passage for a new freelancer to price oneself lower to build up a portfolio, there comes a point in their career when they need to reexamine their rates. This is a natural progression and a sign of growth in expertise. Here are some of the main reasons why freelancers raise their rates.
You should raise your freelancer rates whenever you notice that you’re putting in more work that’s not proportional to the pay. For example, if someone wants to pay you $10 for 3 hours of work, you’re getting less than $5 per hour. In today’s economy, that’s just not going to cut it. If you need to travel to meet a client, the cost of gas and vehicle maintenance can also chip into your bottom line, which should also prompt you to raise your rates.
It takes trial and error to find out the sweet spot of what to charge. Thankfully, using handy tools like automated time tracking makes it easy to figure out how much you're making per hour. After tracking your time spent on each project and figuring in the pay received, you can then figure out if the rates are fair or if they need to increase.
It can also feel scary taking that first step to asking for more. But you’ll be surprised how many clients will be on board with you asking for what’s justly yours. If they are good clients, they will value your talent and know that it’s worth what you're asking.
Raising your freelancer rates should involve some research and tact. First, you should compare what you are charging to what others of the same skill level and years of experience are charging in your same field. You may have a close rapport with fellow freelancers or be able to find data online, such as the average yearly earnings of a freelancer in your area of work.
Once you decide on a fair amount to charge, then you can tee it up for your clients. It can be more intimidating to raise rates with existing clients than to simply charge your new rate to new clients, so we’ll focus on this process first.
Approaching existing clients about a price increase can generate complex emotions. On one hand, you may feel frustrated at receiving a low pay rate that seems “frozen in time” from when you first started working with them. But on the other hand, you know that your value has grown — as well as the cost of living.
While these feelings play tug of war with each other, you must remain confident that if this client has been with you every step of the way, they will have seen your growth and, in many ways, feel lucky that they grandfathered such a deal in the first place. Just like how Netflix increases its rates and viewers stay because they know its value, so will the clients who are meant to be with you.
Eventually, you have to break the ice about the topic. To maintain your relationships, it's best to present the news tactfully and in a personalized manner. You may choose to make a phone call, send a traditional letter, or write a personalized email to your clients based on their communication preferences. Overall, presenting the update in a friendly and honest way promises the best results. Be sure to mention these things to ease the transition:
This isn’t the time to say you want to raise rates because you want to go to Aruba this summer. Instead, mention the valid reasons why you're raising your rates. Whether it’s the increased price of building materials as a contractor, a new certification that increases your value as a hairdresser, increased cost of living and the need to keep up with it, or reaching a new tier of experience that warrants a price increase, it’s all specific to your field and specific needs.
Show appreciation for long-term clients by offering your former low rates for an extended period while you charge your higher rates for new clients — a 30, 60, or 90-day grace period would be ideal. This gives the long-term client a chance to catch up and adjust their budget to your new rates while also honoring their relationship with you.
If the client values you and can work you in their budget, then they will follow you. If they choose to break up after the news, then it’s still going to be okay. Not everyone will be on board and want to shop for the best “deals”. In fact, it's normal to lose some clients when you increase your pay. However, in the world of freelancing, you truly do get what you pay for. When you know that what you're offering is good, you can be confident that the right people will stick around.
Approaching new clients is significantly easier than updating rates with existing clients. After you raise your Fiverr prices by selecting "edit gig" on your gig page, all future clients will pay that updated price. You will be starting on a clean slate, and they won't have old rates to compare your figures to. Here’s the process of onboarding new clients with your higher rates.
A new client will ask you for your services and then want a quote. After you inform them about your rates, those who are interested will naturally follow up and hire you. Don't be too pushy and give the potential client some time to work through their budget and talk to others who need to be involved in the decision.
Your next step is to contact the potential client once more and to see if they are still interested. If you don’t hear from them within 3 business days, give them a nudge. If they respond with a yes, then you can make a game plan about what they want and when. If they say no or don't respond, then it's time to move onwards!
While most will be on board with your rates when they see that the value meets the cost, some will refuse to start or continue with you. This is normal. Some may be direct and say it’s out of their budget. Respect their decision and express your gratitude for their time. You may also recommend someone who still offers the old rates to ease this transition.
Some may ghost you. This is also normal. A new client may get sticker shock and never respond, while an existing client may simply not respond. Let these people go and do not message them after one follow-up. They know where to find you, and in your case, it’s professional to move on and gather clients who honor your new rates.
Asking for a rate increase can make you feel anxious or worried about losing clients, but rest assured that if you're asking for the fair market rate of your skills, you will never lack clientele. If you need help creating a strategy to increase your rates, you can hire the help of one of our talented freelance business consultants. To become a freelancer in your field, join the dynamic team of freelancers at Fiverr today.