Raising Your Fees
It makes perfect sense that raising your fees will increase your income and hopefully, your profits as well. This is a major pain point for all professionals, but it seems to be a topic that designers discuss with colleagues and mentors on a daily basis.
My first mentor had a saying – “One Percent is huge,” and it is when you are speaking of mass volume. For a smaller entrepreneur, you might want to be bold and go up 5% or even 10%.
While we are business owners and entrepreneurs, I would like you to think for a moment as a salaried employee. An employee does great work and expects a raise. This is the reward for their devotion to the company and excelling in their job.
In addition, you are most likely investing in yourself - in your skills through training/CEUs, reading industry blogs, listening to podcasts or audiobooks, or going to conferences. The result is that you are educating yourself and becoming a better practitioner as you augment your knowledge base. This is a direct correlation to the increased value that your clients receive from you, so if you don’t raise your fees, you’re probably selling yourself short.
Even though you are a business owner and not an employee, you ARE employed/engaged by your clients and many of them work with you on multiple projects and for a period of a few years. Like a salaried employee, you have increased costs, have given great value to your client and deserve to increase your fees to be more profitable.
Although we are experiencing inflation, the cost of goods has risen exponentially over the past six months and if you are to stay profitable, you must follow suit with your services. People will pay for value and if you are delivering value, raise your fees to be in alignment with our current economic climate.
It is much easier to raise rates for new clients. While almost all my business is by referral, clients understand that economic times demand price increases and that someone whom you have worked with for years, is an established client and has historical reference.
When raising your rates with existing clients, there are a few methodologies that are worth considering:
Write a letter about the upcoming price increase
Be unapologetic but appreciative of the relationship you have built with the client – this is a key factor in retention. We all have clients we adore and do not want to lose so let them know how important they are to you.
You might lead with language such as this: Our firm wishes to maintain the high-quality service you’re accustomed to, and this modest increase in our fee is necessary, so we wanted to communicate this to you in a timely manner. We are confident that our fee structure is congruent with other design firms that deliver the quality of the service that we provide and as always, we’re focused on the positive outcome and results we provide to our clients.
If you would like to hear more from seasoned designers on how often they raise their fees, click HERE.