Take charge of your rates

Take charge of your rates

Increases are up to you

Probably because it’s a New Year, there’s been a lot written recently about raising rates. I’ve even seen it said that it’s impossible to increase them for existing clients. So, having just raised mine for a large group of clients – something I’ve done many times in the past – I thought I’d offer a little inspiration and encouragement for those being put off by all the misleading noise. Because, however nerve-racking it might feel to actually do it, just like any other business you can always decide to put your prices up.

Let’s have a look, then, at the how and the why (not to mention the what, where, who and when) of raising your rates.

Why raise rates?

This may be the biggest question of all. You’ve got clients who are happy to send you work at a particular rate. Why would you want to change that? In fact there are lots of reasons why you should.

First of all, you know full well that prices go up all the time, which means your cost of living goes up. If, as a freelancer, you don’t put your own prices up, your standard of living will go down. Now you could try to find ways to improve your productivity to bridge the gap. You could, of course, work longer and longer hours to earn the same. But you can be sure your clients will put their prices to their customers up from time to time. So why shouldn’t you?

Then there are clients you have perhaps been working for since you started, when you didn’t know much about what rates to quote. If you don’t correct those anomalies with some increases, they simply won’t be worth working for any more.

And what if you’re always busy? You have so much work that you’re regularly turning jobs away, including things you’d really have liked to have time to do. Putting your rates up is a good way of thinning out that demand. You end up earning the same (or even more) and working less – and that surely can’t be bad.

Who do you increase rates for?

Who are the clients who are going to be asked to pay your increased rates? All of them? That’s what I used to think. Now, though, I try to take a more strategic approach. This year, I’ve put my rates up for one group of clients – agencies in Spain – who have not had a rate increase for a couple of years and are my lowest paying group of clients. Last year I put them up for agencies in other countries and some direct clients. Why divide them like this? My aim is to guard against an (admittedly unlikely) widespread negative reaction to the increase by clients. This way, even if some object to an increase, I have a whole group of customers who are not affected and who I can potentially use to fill any gap.

When do you put your rates up?

You can raise your rates at any time, although I like to do it at the beginning of the year, so I usually send out notices to my clients during December. But do it when you like. You’re in charge. You decide.

How do you do it?

I simply send an e-mail with an attachment showing my new rates. In this initial mail, I don’t discuss why I’m making an increase or try to anticipate possible objections. I try to stay as brief and matter-of-fact as possible. And I definitely don’t apologise. I’m not an employee asking for a rise, I’m a professional giving notice of my new prices.

What happens then?

Clients react in different ways. The best is when they simply acknowledge receipt and get on with the professional relationship. Some do protest, though, and sometimes quite vociferously. With these, it’s best to be firm. Don’t get into an argument. That increase is going to happen whatever they say. Explain as much or as little as you like. If you like, remind them how long it has been since you last raised your rates. Tell them that you’re usually busy but that if you can reduce your workload by increasing your prices you’ll have more time for their jobs. Very often, once they see you’re determined, they will accept your new prices.

Some clients make the very reasonable point that they won’t be able to send you as much work at the new rate. This is actually no bad thing. It means your workload is going to be reduced, but you should still get the better-paid work from that particular client. If you like, you’re becoming that client’s top translator; the one they go to when the budget allows. But if you’re worried about losing too much volume and you have a good relationship with the client, you could always suggest that you might be open to negotiating price for certain specific jobs. That leaves you the option to take a bit of work at your old rate if things are a bit slow, as they can be, for the first few weeks after a rates rise. Don’t make a habit of it, though. To make sure your new rates stick, you need to make it very clear that any discounts of this kind are a one-off arrangement for a specific job.

You do need to be prepared to lose some clients when you put your rates up. They will either make it very clear to you that your business relationship is over or, more likely, simply stop sending you work. This is quite normal. If you think about it, you are losing clients all the time, for all sorts of reasons, and replacing them with new ones. There is no reason why you shouldn’t be able to do exactly the same for clients who stop working with you over price. Having said that, every time I increase my rates I’m always surprised by how many clients stick with me, very often without a murmur.

Where next?

I think it’s always easier to increase rates if you know what you’re trying to achieve in the long term. In my case, apart from the need to protect my income against inflation, I want to move upmarket because I sincerely believe this is the best way for human translators to survive. However, my family responsibilities mean I have to carry on earning a living while I get there so I can’t suddenly drop all my clients while I go looking for new ones as I might if I were young and single. Instead, I see gradual increases as the way forward, while looking for new clients at higher rates. You will have your own motivations, of course, but it’s worth bearing them in mind to help maintain your resolve if you feel any hesitation or awkwardness – as a lot of us do – when it comes to notifying customers of your new prices.

Ultimately, whether you want to increase your rates is up to you. There are times when it feels right to do it and times when it doesn’t; times to be bold and times to be cautious and you are the best judge of that for your own business. But please don’t let anyone ever tell you it can’t be done.

2 Comments

  1. All good advice, Simon.
    I’d add, in terms of timing, that it may be a good idea to get rate rises in before the client has set their budget for the forthcoming period. So that might mean letting them know maybe a couple of months before year end (or whatever planning cycle they use) rather than leaving it until, say, Christmas.
    And you get a feeling for which clients might have more room to accommodate rises than others. If a client confirms your quotes quickly or with surprised delight, that’s probably a sign you could have charged more – and that you could put them at the top of the list for the next round of rises.
    I’ve often used rate rises as a tool to manage my workload, although occasionally you can end up with the nice problem of a client accepting a hefty rise when you thought they’d cut and run.

    Reply
    • Thanks, Oliver. Your point about annual budget processes is a good one. I must admit, I never get myself organised in terms of thinking about rates far enough in advance to do it, but I can see it would probably be a good idea.

      Reply

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