I recently made my yearly call to the accountant. After some small talk and catching up, he apologized, but informed me that my appointment was going to cost a bit more than it did last year. He cited the general state of the economy, the fact that his rent has gone up and that even his printer paper was more expensive now. In all honesty, I didn’t really flinch. He’s always done a great job, and everyone is feeling the economic pinch in some way. I’m still happy to be his client.
This prompted me to think that despite the economic crisis, some service businesses still need to consider raising their hourly rates. I wondered: How is it possible to let clients know that your rates are going up, while making sure they remain satisfied clients? I decided to round up some strategies and advice to make this task a little bit easier for business owners and their clients.
Set Precedents and Expectations
Making a smooth transition to a higher rate card is all in the approach according to Susan Vaughn of 1099 who recommends these three reasons to share with clients.
The Annual-Rate-Hike Reason: “I raise my rates 10 percent each year.”
The More-For-Your-Money Reason: “I’ll be adding extra services that will greatly benefit your company.”
The Rising-Cost-of-Doing-Business Reason: “I’m keeping my fees reasonable, but I’m making allocations for increases in my overhead expenses.”
Nothing to Lose
Test the waters with clients you do not yet have and, therefore, are not as worried about losing. Do not tell them this is an increased rate. They will not know what the old rate was. No explanations are required.
We’re All In This Together
About.com acknowledges that no business is spared during an economic downturn and offers some advice.
From a gas crisis to a health care crisis, there may be highly publicized national issues that are impacting overall expenses for businesses. If your firm is affected by these types of costs, customers may even expect your rates to go up.
You’re Worth It
This sounds simple, but Lea Woodward of Freelance Switch explains you should recognize your value.
If you are 100% confident in the service and value you offer your clients, then you have absolutely nothing to fear from raising your rates.
Do you have tips of your own? What have been your experiences with clients when raising your rates and what are your tips for making it a smooth? Let us know in the comments below!
The Small Business 101 column is where we share tips and ideas from our own experiences and the small business community. If you have articles you’d like to share from your experiences for a future write-up, send us a tip!