Have you been delivering value and results to your clients, but are unsure about how to approach the topic of a rate increase?
Today we are tackling a question that has come up in our community, about how to raise your rates with an existing client.
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Raising Rates with Retainer Clients
If you are charging your client a consistent amount month after month for a scope of work that has been defined, you are in a retainer relationship.
Over time, there may be things that come up such as new opportunities, skills, certifications, or life situations that will require you to raise your rates. That is okay.
If you have reflected and decided that this is the right move to make and the right time in your business to make it, then it is time to raise your rates.
How to Prepare for the Conversation
It is important for you to have an awareness of the business situation. Are you confident that you are delivering more value than you are getting paid for?
“One thing to remember is that reporting is the key to giving you the confidence to raise your rates.”
Are you delivering consistent reports to your leader to show your value, and what you are doing for your business?”
“If you are wanting to raise your rates and not reporting, I bet you will find yourself weary to ask for this increase.”
You will need to pull together some of those reports that show the greatest changes that you have been able to make for the business.
Note that there will be several ways to increase your rate:
- “I’m going to be increasing my rates by 20%”
- “I’m charging “X” now, and am going to start charging “X” for the same amount of work”
- “I’m interested in increasing my earning potential with a profit share option” (refer to Episode 86 of The Ops Authority podcast)
You need to give your client a heads up and a fair notice. You are affecting someone’s budget and they need time to plan. I would encourage you to give them a minimum of 4 weeks notice.
If you are like me, you are going to script this out with bullet points, and practice this to make sure you can present this in a professional, confident way.
You should deliver this message face to face with your client (either zoom or in person), and prepare a short email that will serve as a recap and contain the specifics such as:
- Recap the message
- Effective date of new rate
- What the rate will be
- A reporting summary of what you have done for the client
Send this email after the conversation.
Another thing to consider would be an update to your contract agreement. Have this ready to send at least 2 weeks prior to the change, and give them time to get it back to you.
Set a date and hold yourself accountable to have the conversation.
Dealing with Jitters
You will likely question yourself and wonder what they are going to do if they push back. You need to prepare yourself to have that conversation. If your client can’t pay your new rate you can:
- Offer a stair step method of increase in which you increase a set amount each month until you reach your desired amount
- Decide to revisit the conversation once your current contract is up
- Decide that it is time to part ways
- Reduce your level of deliverable to match their current payment
I hope this has been helpful to you as you navigate these conversations!
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