How to Raise Your Freelance Pay Rates in the Next 60 Days
Freelancers interested in earning big should always be looking for opportunities to raise rates. Luckily, if you’re reading this in the fall, you’re at one of the easiest times of year to get a raise.
I’ll explain why in a minute.
But first, let’s talk a little economic reality about why you need to get aggressive about asking for a raise.
Freelancers need to continuously raise rates, because the cost of living isn’t stable. The price of oil and corn are both going up as I write this, for instance.
You need your rates to rise a bit just to keep up with inflation — and they need to go up more if you want to get ahead.
Fortunately, the approach of a new year sets the stage for pitching clients that you deserve higher rates.
Fortunately, the approach of a new year sets the stage for pitching clients that you deserve higher rates. If like me, you have a goal to earn more money from freelancing each year, rate hikes are key.
I know what you’re thinking: Asking for money makes you feel weird.
But standing up for what we’re worth is the only way freelancers end up earning fair wages. Companies won’t necessarily volunteer to pay you premium rates — but they might give them to you if you ask them the right way.
How can you get your clients to pay you more? Here is my list of effective ways to get a raise:
Raise Your Rates for New Clients
This one’s easy — simply increase the rates you offer to new prospects, effective in January. Start turning down clients who won’t pay that rate. Remember, it’s always better to come in at a high rate than to have to renegotiate for more money later.
Ask Existing Clients for a Raise for Next Year
Note that you should not try this if you aren’t ready to walk away if this client won’t pay your new rate.
If you can make a firm “raise or leave” offer, then mid-November is the ideal time to employ this strategy.
If you ask for more money and they say no and then you stay, you will be this client’s doormat forever. They now know you’ll work for peanuts and have no self-esteem!
No client is likely to double what they pay you overnight.
Next, don’t ask for too big of a raise all at once. No client is likely to double what they pay you overnight. Think more in the range of 10-15 percent. If the existing rate was very low, I’ve known clients to spring for 25-50 percent more. But smaller raises tend to be more readily accepted, so be careful.
Notifying clients of a rate hike that won’t take effect for six weeks gives the decision-makers time to absorb the idea — and to budget a little more for you in next year’s budget, which they are likely working on now. The fact that they don’t have to start paying more right away helps make that rate-hike news more palatable.
The trick is to make the client feel special, before you drop the news on them. Then, make it look like they are still getting a deal at the new rate.
I use a script that goes like this (bracketed parts give the rationale behind each statement):
Dear client:
My business has grown substantially over the past year. I’ve loved working with you, and over the months I’ve learned a ton about your business/publication. [Translation: I'm reminding you I'm worth more to you now than when I started -- and it would involve a time-wasting ramp-up to break in a new writer.]
My rates have increased as the year rolled along, but because of our great relationship, I’ve kept you at your original rate. [I've given you special treatment!]
However, as of the new year, your current rate will be below my floor. That’s why starting in January, my rates will be X.
I appreciate your business and look forward to our continued relationship. Please let me know if you have any questions about my new rates.
Sincerely –
By being confident and clear about what raise you need and when it will take effect, you come off professional. Giving the client lots of notice also helps keep clients from feeling sandbagged.
If you really want to ease them into it, add a sentence that says, “My rates in January will be X, but because of our relationship, I’m willing to extend you at your current rate until Feb. 1.” That will give them yet another whole month at the existing rate.
When you ease them into the new rate in your February billings, they’ll likely hardly raise an eyebrow. You’ve taken a rate raise and spun it into a 1-month discount, so the client can still feel like they’re getting a deal.
Pitch Higher-Paid Services to Existing Clients
A writer might make $50 a blog post, but pitch a special report or white paper to that same client, or a rewrite of their website, and you might snag a project worth $1,500-$5,000 or more.
If necessary, learn new skills in order to offer services that command better rates. Upselling current clients is easier than finding a new client, every time.
Offer Volume or Package Discounts
If you think the client might balk, offer more than one option. Perhaps if they’d sign an ongoing contract that guarantees you more work than you got previously from this client, you’d discount that new higher rate a bit.
This one’s a win-win — you still make more and you get additional work volume, while the client avoids having to pay the highest new rate you had in mind.
Become an Agency
If you’ve been a solo freelance writer or graphic designer, consider teaming up with others to form a virtual agency. Creative teams and agencies often command double or more the fees of freelancers who are positioned as solopreneurs.
Offer to help that client by bringing on a designer or writer and managing the whole package for them. Less hassle for the client = higher fees for you.
Find More Clients Yourself
Lots of writers fall into an easy rut of getting work through intermediaries — agencies or job platforms such as Elance or Guru.com. Just remember, every time you do that, you’re likely giving up half or more of the income from that gig, as I just mentioned above.
For instance, when content mill Demand Media filed to go public, its data revealed that it was paying writers $15 for a typical article, while bringing in an average of $54 in ad revenue.
Up your marketing game and pitch clients directly (or drive traffic on your own niche websites and put up your own ads) and you could keep all the revenue instead of just getting a portion. It’s more work than sitting at your computer browsing opportunities on some aggregator platform, but proactive marketing can pay off in better-quality clients and substantially higher pay.
Use the 1-Year Anniversary
If it’s not year-end when you read this, know that there is one other natural opportunity to begin a discussion of rates — and that’s on the anniversary of when you started working for this client.
Surely you are a better writer and know more about your topic now than you did then, so you deserve a higher wage. Keep a calendar of when you started with each client, so that you don’t miss an anniversary.
Drop Fixed-Rate Clients
If you’re freelancing for mills or other places where getting a raise is impossible because the client only pays one set, low fee to everyone regardless of ability, this is the wrong type of client. Start laying the groundwork now with your marketing to leave your fixed-rate clients. This time next year, you want to be writing rate-raise letters to the sort of clients that will pay you more as your knowledge of their business increases.
Drop Your Lowest Payer
Nearly every freelancer I know has one client they know they should dump. The rate is too low, and often this client is also their most difficult to work with, too. If this client’s rate is below all your other clients, they are dragging down your average pay. They’re also probably dragging down your self-esteem, too.
Dropping your bottom-feeder will instantly boost your self-confidence, along with your regular wage. Killing off your time-sucker client also frees you to do more marketing activities that might bring in a better-paying client.
How will you raise rates as we head towards 2013? Leave a comment and let us know your strategy for the coming year.
Leave a Comment
Raising rates is not that simple. Especially in regions where there is a lot of competition. Old clients expect bonuses and discounts rather than price rises.
Lukasz, since it’s a global business, I think of everywhere as having a lot of competition!
If you’ve been working for a client for a year, you are more valuable to them than when you started, because of all you’ve learned about their business, or their publication’s audience.
If you don’t have the kind of clients that can recognize and will reward that, you’ve got the wrong kind of clients. There is value in a good client’s not having to start over educating another writer on the type of business they do, their customer, their products, etc.
Thats right about the competition, however, the region you are working shouldnt be a concern for a telecommuter
Your advice about dropping the lowest paying client is wonderful. I did that once, when reviewing my business focus, and the results are great.
But, based on the other message you have on this article, I got to do more.
Well, luckily you are the perfect time of year for it!
It’s great! Sometimes, if you don’t track things, your lowest paying client may be consuming the most time and costing you the most money.
I’m doing full time freelancing for almost four years now. I still have few clients since I first started and I never had to inform them of my new rates and they never complained either. Provide great quality, be reliable and show them you are there for them when they need you and they won’t mind your new pricing.
I follow the same strategies explained in this article with some of the clients and it works great.
Glad to hear! It’s true — I think good clients understand that freelance rates go up over time, as you build the relationship and your value. If you don’t try for too fat of a raise all at once, you can keep seeing increases.
And they compound over time — get a 5% increase this year, and a 5% increase next year, and that’s MORE than 10% additional.
A good way to raise the rates is when you find yourself in a point that your business is really valuable to the employer. That is, when the relationship is so strong that the employer saves time with you, which directly translates in a hidden income to him. You should take advatange of that hidden income, and take a part of it. The employer isnt going to leave because he is aware of this. Taking in a new employee means losing this extra income from the time saved..
This is some of the best laid advice I’ve read. I think these ideas are brilliant and RIGHT ON TIME! Now I believe I finally know how to earn a living wage from my writing.
Thanks, Carol
Awesome Sarah — let me know if you are able to use these tips to get a raise — I’d love to hear.
Carol, once again it’s like you’re reading my mind! My one-year anniversary of a few of my clients is coming up and coincidentally the date is mid-November. So I have high hopes that my rate increase will be accepted, especially since you share some smart tips.
Like the smaller 15% increase instead of a huge jump. If I raise my rate a little all across the board, it could really add up. I’ve only been a freelance writer for about a year, so this is my first real rate increase. Thanks for the help as always, your advice is much appreciated!
Thanks for this great read, some very useful things to keep in mind and get working on. The “raise for next year” and “anniversary” pitches are fair and legitimate arguments. Again; thanks. Great article!
Very informative article! Thanks for reminding us of the best options for raising rates with clients. I tend to raise my rate yearly also and love your methods for completing this!
I LOVE the email template and the concept behind it – “a gradual increase, set to begin in the New Year”. It’s simply brilliant and an idea I have not seen before.
Thanks Carol for your super helpful advice, am a big devotee of your Make a Living Writing blog. As it’s always chock full of good tips, advice and success stories.
Thanks again,
Missy
Thanks Missy! Glad you’re finding my blog helpful.
I find this technique is sort of the cooking-the-frog type thing. You’re slowly turning up the temperature on cost. It’s not so much more that it hits a pain point where the client says “Wait a minute! I can’t pay those rates.”
Many providers raise rates in the new year — Internet, maid services, transcribers, you name it. When you slip in a small rate raise for the coming year, I think most clients just sort of sigh and budget it in for 2013, and move on. The small pain of paying you a bit more is less than the bigger pain of training up a new freelancer.
Great post. I am currently on a debate on what to do next to raise prices. I always give out Thank You coupons to my clients around the Holiday time. Then in January I send out my new Terms and Conditions for the new year. My biggest struggle is logo pricing. *shrugs*
Here’s what wrong with waiting until January to send new rates — budgets are already set, and you’re going to get more pushback.
By giving them the 6 weeks notice now, you get into their budget at the new rate, and when January rolls around you just bill the new amount, and it’s all a non-issue.
Brilliant advice! I have been a freelancer for 30 years.By experience, I know that your advice is the right thing to do. Many people are scared to dump bad clients. Don’t. In the long term, is better to let them go . Uncertainty always make you feel doubts about it, but I can assure you, it pays to dump cheap clients. The world is full of wonderful people and new opportunities. Take the chance. You will never regret it.
I’ve had the exact same experience, Silvia — dropping my worst client seems to almost immediately make a better one appear. It’s like you create a vacuum when you open up that free time in your schedule that draws a new opportunity to you.
Thanks for the details. I am happy for finding this post & its very useful at this point of time as a freelancer.
For several of my clients, the fiscal year starts in October. Therefore, August might be the best time to communicate this message. Just something to keep in mind, and I will!
Ooh, great point — know when your clients’ fiscal years fall, and time your raise letter for THEIR new budget, even if it’s not Jan. 1!