Knowing when to raise your rates
Freelancing offers unmatched flexibility, allowing you to set your own schedule, choose clients, and craft your professional path. But with this freedom comes the sometimes daunting task of setting and periodically raising your rates. Knowing when and how to increase rates can make a massive difference in aligning your income with your skills, experience, and market demands.
While initially you may be tempted to start with a smaller rate to build a strong and loyal client base, it's important to calculate how much you'll earn following all hidden taxes and fees from your freelancing platform, banks or any other third party intermediary. For this reason, we recommend using a freelancing platform that cares about you and minimizes platform usage fees!
Recognize when it’s time for a Rate Increase
Timing is everything when raising rates. Ask yourself the following questions:
- Have you gained new skills or certifications?
- Is your workload overwhelming?
- Are you meeting or exceeding client expectations?
If you've invested in your growth, your rates should reflect your enhanced expertise. A full schedule can indicate that your rates are on the low side, as high demand often justifies higher pricing. When clients frequently commend your work, they likely see the value in paying more for it.
Research your Market Value
Before setting new rates, take time to evaluate where your skills stand in the market. Use resources like freelancing platforms, industry forums, and salary comparison websites to gauge what others with similar experience and expertise charge.
But don't stop there - identify any specialized skills or niche expertise that set you apart, like proficiency with specific software, familiarity with a unique industry, or an advanced certification. These unique capabilities are often worth a premium, and they give you concrete justification when discussing rate adjustments with clients.
This research and self-evaluation not only allow you to price yourself competitively but also help communicate your distinct value to clients, showing them exactly why you’re worth the investment.
Communicate the Change
Approaching clients about a rate increase can feel intimidating, but a clear, value-focused communication can make all the difference:
- Be transparent. Share that the increase aligns with market trends, your skill advancements, or an elevated service standard.
- Give ample notice. Clients appreciate time to adjust budgets, so inform them at least a month in advance.
- Explain the added value. Highlight what clients gain with your services and assure them they’re investing in a continued high standard of work.
Consider saying something like: “As I continue to enhance the quality and scope of my services, I’ll be adjusting my rates to reflect the added value I aim to provide.”
Be ready to negotiate, but stand firm
Not every client may be able to accommodate a higher rate, and that’s okay. Prepare to discuss options that may include adjusted services or alternative pricing structures. However, remember that the rate increase reflects your worth; being selective about clients can ultimately lead to more fulfilling, lucrative partnerships.
Start with New Clients
If you’re hesitant about raising rates with current clients, testing new rates with fresh clients can be a strategic move. When onboarding new clients, you have a clean slate to set expectations and introduce your updated rate as your standard fee, without the pressure of explaining the change to existing clients. This approach helps build a portfolio of recent projects at your updated rate, demonstrating the market’s willingness to pay your new fee and reinforcing your decision to current clients.
Additionally, by establishing new clients at the higher rate, you set a new baseline for your services. This strategy often makes it easier to gradually transition your loyal clients to the new pricing model, creating a smooth path for your overall business growth.
Raising your rates as a freelancer is not just about making more money; it’s about honoring your skills, growth, and the value you provide to clients. With the right approach, clear communication, and a bit of confidence, you’ll find clients who recognize your worth and are happy to pay for it.
Another factor that will enable your success is by building a stable client base on a platform that ensures you keep most of your earnings. HYVE minimizes platform cost so that you can earn a fair share for your work, ensuring that your rates are not diminished by hidden fees and tariffs. Join the HYVE telegram group and start discussing with a community of like-minded individuals and freelancers!