02.13.13

ADVICE / 51

today’s question: “how do you tell your existing clients you’re raising your rates?”

KATIE’S ANSWER:
your reason for raising your prices could be a personal matter or maybe you’ve recently looked at your business plan and you realize you’re not profiting enough. when it comes to telling your clients about your new fee, just be honest. be prepared to give a reason or two to justify the increase. explain to them what investments you’ve made to your skills or business that caused the increase. maybe you just took bri’s video class and now the quality of your work is SO MUCH better. are you faster? do you know more tricks so you can take your videos to the next level? find something to tell them so it doesn’t seem like you’re just making up a number out of thin air.

now that i’m full time freelance i have to raise my rate because it will be my only income. but! instead of the client waiting weeks for rounds of their designs (i was previously working nights and weekends) i can turn it around in a couple of days to a week. higher prices but faster turnarounds. i will also have the time to be available during the day and give them the attention they deserve. if your client is upset you could try to sweeten the deal if by throwing in an extra service if they’re not happy about your new rate. hopefully they will respect you enough as an artist and make it work.

when you’ve figured out how high you’re raising your fees, give your clients at least a months notice so they can work it into their budget. if they give you a hard time or it’s totally out of budget for them it’s your decision how to proceed. do you find a number that works for the both of you? do you raise your fee gradually over the course of 3 months? if you love the work you’re doing with them maybe you’re willing to give them a special rate.

if someone leaves you because of your new rate, don’t sweat it. they probably didn’t appreciate or value your work enough. just keep moving on. use that extra time to find new clients. every year you’re in business, it’s another year of experience under your belt. doesn’t that justify some sort of increase?

BRI’S ANSWER
this can be awkkkk-ward. but necessary. like katie said, it really depends on your current financial situation. if you are trying to make a living on design but your friends keep asking you to do work for them at major discounts (which means you won’t have time for paying jobs) then how is that fair? looking back i’ve noticed a few things…when you are young, just starting out and have potential…people will notice it. they will try to snatch you up at low prices, and you are going to be stoked because you just want to work! believe me, i have had people reach out to me asking “do you know any young designers…ones that will do it for cheap?” this industry keeps it’s eyes out for fresh meat because they are eager, willing and save them a few bucks. it’s just how it goes (but this is just based on my experience.)

then you grow up a little, learn that you have been charging WAY too low, get a lot more experience with pricing and people either go two ways with it. they hire you on big jobs or they move on to the next fresh meat. that part usually has an email that sounds like “i know i can’t afford you anymore, but do you know anyone?” it can be a bit hurtful because you say to yourself…”oh, they just wanted someone who would do it for free or cheap.” but don’t take it personal. people will always try to save a dime. you will have other new clients by then and it won’t faze you.

be up front with people about your rates. you can still offer friend discounts (i do) but just don’t charge a low amount or do a project for free and be resentful about it later.

(illustration by katie evans. read more freelance advice posts are over here!)

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  • 1. Jane  |  February 13th, 2013 at 10:40 am

    Such great advice! My sister is a GD student and doing freelance projects on the side. Throwing out a price to clients is difficult–she gets responses with the tone of “you’re a student, you’re supposed to be cheap” and undervaluing her TRUE skill. A lot of people are asking for a lot–for cheap!

    Best,
    Jane

  • 2. Kory  |  February 13th, 2013 at 10:57 am

    Pricing is by far my biggest issue so far. I think it’s hard when you’re starting out and don’t know how much your work is worth or what people will pay. I’ve been working on slowly raising my prices as the demand grows while also keeping in mind my financial need. It may be rough to work for so little now, but I think that in a year or two I’ll be making more with more experience.

  • 3. The New Diplomats Wife  |  February 13th, 2013 at 11:11 am

    as someone who buys design services, there definitely comes a time sometimes where someone i had been working with becomes unaffordable for me. And i completely understand – they need to price at what’s best for them. But sometimes, no matter how much I love the work, if I don’t have it, I don’t have it, and if they are straightforward with me about pricing, then I’m straightforward with them about budget. And as for recommendations, some of the best working relationships I’ve had have come from recommendatations by biggers designers who were unaffordable for me originally. And it wasn’t so much about getting it on the cheap (though agree that there is a LOT of that out there) but rather getting the right talent that was interested in the work I had to offer at a price that I could afford. At the end of the day, both sides of the transaction have to feel comfortable, and it can still be a great relationship without either side feeling that they missed out.

  • 4. alicia  |  February 13th, 2013 at 11:40 am

    ugh, pricing! Yuuuck!!

    it’s by far the hardest. after working with one of my clients for a little over a year I gave them a month notice that I was raising my wage. i had been working with him for a long time, i had been continuing my education, offering so much more knowledge and skills. he’s always very short in his communication and said he would have to look for someone else. i thanked him for the work i had done with him so far and said i’d always be available if needed.

    roughly a month later he e-mailed me with a ton of work. he wanted the cheapest buck but he also was too lazy to go look for someone new. my increase was very reasonable, he knows that. he was also aware of the fact that due to working with him for so long i was very familiar with his brand, worked quickly and efficiently.

    i am happy to still work with this client and feel better now that i am charging him a wage i believe its more fair.

  • 5. Tobe | Because It's Awesome  |  February 13th, 2013 at 11:45 am

    Great advice! All of it so true, ladies. I think a lot of people innocently undervalue what kind of time and research great design takes, so they don’t expect prices to be what they are for strong talent! Just wanted to throw in that, when I was freelancing regularly, I went by the rule of increasing rates incrementally based on experience and expertise I was developing. So, maybe a slight tick up of 5-10% or whatever you’re comfortable with each year. That way, it’s not such a shock to your clients, but gets you closer to where you should be as you gain professional experience.

  • 6. alicia  |  February 13th, 2013 at 11:47 am

    i also get the “cheap buck” for students that are fresh, young and full of desperation and creativity but it’s often hard not to take it personal.
    it’s tough when you need to justify to your client why you are charging x-amount. you have knowledge, skills and pay bills too. do you question your plumber why he charges x-amount? usually not.
    this may sound stupid but the hardest part is when a project comes along and you get excited about it and then the client breaks their tiny budget to you. you will hate yourself for agreeing to it so you don’t. and you also know that that client will be able to find someone that will do it for that price. it may be a student or an amateur, but most likely the work will not be as good as it would be if the client paid what its actually worth. a lot of times you do get what you pay for.
    design is such an important part of your brand and it’s so frustrating when clients don’t value you as a design and realize that they need to pay to get good deliverables.

  • 7. Anni  |  February 13th, 2013 at 12:03 pm

    Great advice. I’m pretty lenient (maybe too lenient?) with clients who inquired before the pricing increase, unless they’re proposing new projects, in which case I just send over my updated pricing. For the most part, the clients who really nickel and dime you aren’t worth it anyway – everyone who is reasonable understands that we still have to eat/pay rent.

  • 8. Sarah  |  February 13th, 2013 at 2:01 pm

    It actually bothers me that people feel like they can get the same quality design for cheap, and that’s a good way to cut costs. Just like any industry, YOU GET WHAT YOU PAY FOR! I imagine if you needed a lawyer, you wouldn’t just choose the cheapest one you could find. Designers who work for less devalue the whole industry, and ultimately aren’t doing themselves any favors either.
    I’ve had several sticky situations designing for friends. I also have a homie hook up rate, that I feel is very reasonable, it’s 30% off my standard fee. I’m always very up front about my rates, and make sure that although I would love to create something beautiful for a friend, I can’t work for free. And like Bri says, spending time designing at a lower rate for your friends will cut into hours that you could be spending on full price clients. I’ve found that trading with trading with other creative friends can be a really great way to do business. If you need head shots for your blog, maybe you could design a new logo for a photographer buddy. Thats what I did for my blog redesign that just launched today! http://www.afinelineblog.com

  • 9. Megan Isabella  |  February 13th, 2013 at 6:10 pm

    Something I have found very helpful is reminding my client before quoting them what a graphic designer does. Quite often they don’t understand the full scope of what you do. Once you have reminded them that you don’t just ‘make things look pretty’ but delve deep into their needs / niche in the market / business strategies, then they will realise they are getting a full service. It never hurts to spell it out to them.

  • 10. Cambria  |  February 13th, 2013 at 6:35 pm

    Hi, thank you for writing this! I have been wondering the same thing since I just went full time wedding-photography and am in the process of jacking up the prices. For all reasons you explained. It is a tough process! Esp the awkwardness. Anyways, this was super helpful. I’m also coming to the BlogShop in NYC in May and I CANNOT FREAKING WAIT! xo C
    gracebyc.blogspot.com

  • 11. Link Love: 2.14.13 | Nubb&hellip  |  February 14th, 2013 at 6:15 am

    […] • This is a tricky one: How do you tell your clients that you’re raising your rates? […]

  • 12. Clarissa  |  February 14th, 2013 at 11:58 am

    Having so much trouble with locking down clients because of a price. I get the economy can be tough, but I can’t pay my bills while I discount you prices, you know?

    Anyway, this is a good post. Thanks for this :)

  • 13. Charlotte  |  February 16th, 2013 at 3:17 pm

    This is such good advice, I’ll be bookmarking this for furture use x

  • 14.  |  February 17th, 2013 at 8:02 pm

    […] amazing invitations by the hungry workshop this great blog; jane reaction advice for a freelancer… brilliant! creating the perfect […]

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