My So-Called Freelance Life - Michelle Goodman [78]
Just as there’s no one right way to build a freelance career, there’s no one way to break the news to a longtime client that you’re raising your rates. If you’re a dog walker, cosmetologist, or business consultant with standard session or project rates and dozens of clients on your schedule each month, snail mailing a letter to your customers to tell them how much you love them and appreciate their business—and that due to increasing operating costs, you’re raising your rates effective the first of [whatever month you’ve determined]—is the easiest and most considerate way to address this. (To me, email feels cheesy in this instance; plus, it’s too easy for bulk emails to get lost or tossed without being read.)
Give your existing clients two or three months’ notice so they’re not blindsided by this change, but charge any new customers who walk through your door your new rate, effective immediately. There’s no reason to tell them that you just raised your rates. You have nothing to gain by oversharing that nugget of information.
If, however, you only work for a handful of clients each month and your rates vary wildly depending on project scope and industry (for example, if half your clients are nonprofit arts organizations and half are Fortune 500 biotech firms), skip the letter in favor of a phone conversation. The next time the client offers you a project, explain how much you heart them and the work they feed you but that all your other clients are paying you at least [whatever rate you’d like them to come up to] and you need to start charging them that amount too. Be confident and concise, just as we discussed in Chapter 11; don’t whine, beg, or mention your staggering student loans. Remember, you’re a professional, not their Thursday night beer buddy.
Some clients will shoot you down; when asking for extra green, I’ve won some and I’ve lost some. But if a client’s costing me potential income by refusing to pay me the rate I know I can make elsewhere, it won’t be long before I trade up to a customer who can afford to pay me more. I may love the work and the PIE (exposure) the client offers, but usually I’ll start cutting back on how many assignments I can take from them right away. And once I find a comparable company or media outlet to work for (usually within three to six months), I’m out of there, just like an employee who gets a better day-job offer.
Rekindling a relationship with a client you haven’t worked for in six months or more makes a fantastic opportunity to increase your rates. Often a client who’s been off your radar awhile will say, “Remind me of your rate again?” when you’re discussing the terms of the project. But regardless of whether they do ask, if you haven’t raised your rates with them in at least a year, you’re in a great position to say “I’m now charging $80 an hour for this type of work.” End of story. No need to do a song and dance about the rising price of gasoline or paperclips since you last spoke. This is just the rate you command now because you’re that fabulous.
So how often should you bump up your rates as a rule, and by how much? Raise them by at least 5 percent a year or 10 percent every two years, says Mikelann Valterra, director of The Women’s Earning Institute in Seattle, which has been advising self-employed women on how to earn their worth for almost a decade.
Don’t worry about some clients dropping off your radar. “Not everyone should be able to afford you,” Mikelann says. “If everyone can afford you, you’re not charging enough money. You need to lose some clients off the bottom to make room for clients at the top.”
That said, be careful not to ask for the sun, the moon, and the paid subscription to Starz. “If you’re brand-new and you’ve got 50 percent of people walking away from you, that says that (a) your price is too high, or (b) you’re not talking to the right people,” Mikelann says. For freelancers who’ve been in business just a couple years, 20 percent price resistance