It’s an inevitable part of the freelancing world. Eventually, you must raise your rates. It’s understandable to feel reluctant to inform your current clients of an increase in freelancing fees. After all, the last thing you want to do is scare off your loyal clients.
But think about this. Employees in contractual, fully employed positions often receive an annual pay rise (sometimes even more regularly), at least in the private sector. As a freelancer, you’re just as entitled to a pay hike. You just need to go about it the right way.
This article will help you navigate those potentially awkward email exchanges you’re anticipating with your clients. We’ll show you how to negotiate freelance rates the right way. Let’s get started.
1. Give advance notice, in writing.
“Surprise! As I’ve been doing so much great work for your business, I’m just letting you know that I’ll be charging an extra 10% on top of my usual fees as of tomorrow. Thanks!”
You don’t need to be a genius to realize that the above example is not the right way to negotiate freelance rates. Giving your client a day or even a week’s notice in advance of your rate increase is both rude and unprofessional.
Think of it a bit like leaving an employed job. You wouldn’t leave employment by giving your employee such short notice. Informing your clients ahead of time is the right way of going about this.
This notion even applies to side gigs. Freelance work on the side of one main job still counts as freelance work.
Remember that this is a negotiation process, not a demand. Therefore, you need to give your clients time to process the proposed increase. They may even want to haggle you down a little — say you offer 10%, they suggest 5%, and you end up meeting in the middle at 7.5%.
How do you issue that notice in advance? Here’s a great sample template from Flexjobs:
As for the negotiation, that takes time and careful calculation from both parties. This process is not an exact science. It often depends on the health of your client relationship, what your freelancing business is, and how long it has been since your last increase.
But on average, Ian Vadas of Millo suggests giving at least one month’s notice. That’s a similar timescale to giving notice on leaving a job, in general, with 90 days being optimal. As long as you don’t give your clients a nasty surprise, they will appreciate you offering them time and space to consider your proposal.
2. Limit the rate hike of your freelancing fees.
Doubling your pay rate overnight may seem a tempting prospect. Unfortunately, it’s not realistic (unless you’ve doubled your clients’ profits over time, thanks to your services).
Hitting clients with the prospect of a massive pay increase will likely result in them dropping you in favor of someone cheaper. However, there are fine margins involved in calculating the most sensible and fair rate hike for your clients. So, approach this area strategically, and you’ll be fine.
Tom Ewer of Bidsketch suggests raising your rates by no more than 20%. A realistic figure would be between 5% and 15%, so make your judgment that stays within these thresholds.
You may feel comfortable raising your prices more with some clients than others. Ultimately, the decision rests with you. That’s part of the beauty of freelancing!
Just be prepared for some clients to end their working relationship with you. That’s bound to happen at some point.
It isn’t the end of the world, though. The value of a freelancer’s work can be a subjective notion, so you should soon find a new client that is willing to pay what you’re asking for if you can justify it. It’s all part of the process of how to negotiate freelance rates.
3. Try not to raise fees with new clients.
Telling your regular clients (the ones you’ve been working with for over six months) of your price increase intentions should be okay. They will most likely trust you and will have witnessed the value of your work first-hand.
For example, if you’re a writer, your client will have seen the quality of your work progress over time as you’ve naturally learned how to write better.
Newer clients are a more challenging prospect. Negotiating a raise in your freelancing rates early on into a work agreement with a new client can seem abrupt, and the client may be suspicious. They may view you as audacious at best or downright dishonest at worst. That might cause them to end your agreement and no longer want your services.
When dealing with newer clients, it takes time to build trust and for them to recognize your skills. Keep producing good work for them, stick to deadlines and take constructive feedback on board.
If you do this, you’ll soon work yourself into a more favorable position and more solid ground for you to propose a fee raise eventually. You’ll be more confident when considering how to negotiate freelance rates.
In summary…be patient with new clients, prove your worth, and then the rewards should be forthcoming…if you’re brave enough to ask, that is!
4. Be flexible with long-term clients.
Reliable, long-term clients are like gold dust in the freelancing world. Having a dedicated client who pays on time, provides regular and fair feedback, gives you regular work, and is pleasant to deal with can be a rarity.
With this in mind, such long-term clients deserve to be treated a little more preferentially than newer clients. Don’t dismiss them if they ask for a few conditions (such as a staggered payment plan) once you propose a fee raise with them.
The cost of finding a new client that pays your new fees compared to a slight delay negotiating the raise with a long-term client is often not worth it. Be accommodating where necessary but don’t give your long-term clients all the power.
Common sense plays a pivotal role in how to negotiate freelance rates. Each client is different and may require treatment that’s also different.
On the other hand, don’t be afraid to stand up for yourself either. If a long-term client suddenly makes an unreasonable request in response to your suggestion of raising your rates, have the conviction to challenge it. Remember, as a freelancer, a lot of things happen on your terms.
5. Increase rates at the same time.
Employees in salaried roles often have annual salary reviews or annual pay increases. It’s natural to do the same as a freelancer. Your clients shouldn’t think of this as unreasonable. They may even expect it if they’ve worked with several freelancers in the past.
So, with this in mind, try to keep your increase in freelance fees as a regular occurrence, perhaps every January or April (to coincide with the new financial year). Choose a date and stick to it. Increasing your rates at the same time each year or so will make it easier for clients to know what to expect from you.
Of course, life isn’t perfect. Certain variables may prevent such regularity but stick to one as much as possible as a guideline. Be ready to accept you might need to change it slightly over time.
You might consider including a periodical fee increase clause like the one above in your freelancing agreement with your clients. It’s a bit like an amendment or disclaimer in an employment contract. This clause should refer to the fact that you may increase your rates periodically. That will give clients plenty of notice of what to expect.
Freelancing can be a tough gig at times. Merely finding good, reliable clients seems a big victory alone. The prospect of scaring them away with rate increases can be terrifying. Thinking about how to negotiate freelance rates can be the last thing you want to deal with.
But think about it. The more experienced you become, the more excellent value you’re providing your clients. The higher the quality of your services. Therefore, your pricing should reflect this uptick in quality. Otherwise, you’re getting undervalued and underappreciated for your work.
Take these tips on board, and you’ll soon be negotiating a freelancing fee increase with renewed confidence and conviction. Any client with a sense of professionalism and respect for you as a freelancer should fully understand your motives.
Good luck with the future of your freelancing fees and business, and remember, don’t sell yourself short!