How to Inform Your Clients of a Rate Increase
<p>As a self-employed person, you are responsible for maintaining a great working relationship with your clients. You need to make sure you meet their needs professionally and charge them a price that you think is right–which may include increasing your rates from time to time. Let's be clear, no one likes to be told that they are going to have to pay more. However, there are ways to make sure you don’t upset your clients. Here are some tips on how to tell customers that there will be a rate increase.</p>
<h3><strong>Explain Why You Have to Raise Your Prices </strong></h3>
<p>Before we go any further, let's look at why many freelancers and self-employed people feel uncomfortable raising their rates. You know how difficult it can be to find your first customers, especially when you don't have a lot of experience. Many people then make the mistake of offering their services at a very low price. Then, over time, you gain expertise and credibility. Unfortunately, you are still caught up in these low rates.</p>
<p>There are many certainties in life and one of them is that everything becomes more expensive. One of these reasons is inflation. For example, average inflation in Canada in recent years has hovered around 2%. This means that each year, prices rise by 2%. A $1 Tim Hortons doughnut would be $1.02 the following year, then $1.04 the next year. If restaurants and stores raise their prices on a regular basis to keep up with inflation, why not you? As well, you will always have more experience than when you started. We would also like to tell you that most of your customers will accept your increase if they are satisfied with your services. For the others, tell yourself that there will always be someone who can do your job for less unfortunately.</p>
<h3><strong>How to Calculate this Increase</strong></h3>
<p> Before contacting your customers, take the time to calculate your rate increase and come up with the reasons why. That way you will be more prepared if your customers ask about the increase. Decide whether you want to apply this increase to all your services or only specific services? Are you catching up for the last few years that you didn’t increase your rates or are you just increasing the costs of your services? Also, find out if your rates are still competitive. Why not take the time to learn about prices from statistics? Finally, do you know <a href="https://www.momenteo.com/blog/how-do-i-set-my-rate">how to set your rate?</a></p>
<h3><strong>Get your Customers Ready</strong></h3>
<p> The best way to do a rate increase is to notify your customers at the right time. The new calendar year or a new fiscal year is a good time to change prices. Therefore, inform them a few months in advance so they can adjust their budgets. This can be by email, phone, or in person. The important thing is that they are not surprised when they receive your next bill with your new rates. Some people also add this notification to their signature block. That way, your customers cannot say that you never let them know that your rates were going to increase.</p>
<h3><strong>Stay Honest</strong></h3>
<p>One mistake you can make is to give too many or not enough reasons for your rate increase. Sometimes too much is the same as not enough, as we say sometimes. Keep it simple and real. Don't start saying that your materials costs more when the only thing you use is your computer. Or, that the increase in the price of oil affects your business costs when you work from home. You can simply mention that for several years you have kept the rates of your services the same and add that you care about the relationship you have with your customers.</p>
<h3><strong>Talk about Your Experience and Improvements </strong></h3>
<p>As well, you can use the fact that you offer better services than you did when you started. It may take you less time to complete your projects or perhaps you have acquired new knowledge that makes you a higher functioning professional. Have you taken a new course or learned how to use new software, for example? Are you now a member of board or association that gives you more credibility? You need to show your customers that you are improving to better meet their needs.</p>
<h3><strong> Use the Classic Feedback Method </strong></h3>
<p> Do you know the classic feedback method? This is a way to give bad news that is often used in relationships. It involves saying something positive, then something negative, and concluding with something positive. This makes the bad news easier to accept. Here's an example of this method for a rate increase: start by saying that you really enjoyed working with your client on a particular project. Then mention that unfortunately, you have to raise your rates. Then finish by offering a compensation of sort: a gift, new service, access to a free ebook, or offer a bank of hours at an enticing rate!</p>
<h3><strong> Make Your Decision and Don’t Back Down</strong></h3>
<p> Finally, if you feel that your rate increase is fair, it is important to be firm and not back down. If you want to be flexible with certain customers, that is up to you. However, we should not fall into the trap of giving a special rate to everyone. Again, show that this price increase is worth it, that your services are worth it. Your work gives you the freedom to choose with whom you work. It is therefore important to build good relationships that will last over time.</p>
<p> </p>
<p>In conclusion, we hope that you now have enough tools so that you can prepare for your next rate increase. An increase that perhaps you have been wanting to do for so long. We understand that it's not easy but start by doing your homework and making a list of reasons why your services are now more valuable. Then tell your customers professionally. Good luck!</p>